South Korean steelmaker Hyundai Steel continues to look for lower import scrap prices and it has managed to procure material from New Zealand. Demand for Japanese scrap in general remains low in South Korea, though some mills have slightly increased their bids to secure some cargoes.
SteelOrbis has learned that Hyundai Steel has booked 15,000 mt of scrap from New Zealand, with the HMS I scrap price at $475/mt CFR. Dongkuk Steel bought 6,000 mt of Russian A3 scrap at $480/mt on CFR last week. As a result, the New Zealand deal indicates a slight decrease in South Korea’s import scrap prices. It is also important to state that the latest indicative price level from the US to South Korea for HMS I scrap was at $490/mt CFR on August 25.
Meanwhile, South Korean rebar producer Daehan Steel has given bids for Japanese H2 grade scrap at JPY 46,000/mt ($418/mt) FOB, up by JPY 500/mt ($4.5/mt) from last week. Some other buyers in S. Korea have been interested in purchases of some volumes at JPY 45,500/mt ($414/mt) FOB. “The Japanese FAS price is still JPY 45,500/mt today, and so it is not surprising that some cargoes may be traded at that level, but I believe it won’t be a lot,” a Japanese trader said. Last week, a bid for H2 from Hyundai Steel was at JPY 44,000/mt ($400/mt) FOB, but at the moment most sellers see this level as being reasonable.
The outlook in the Japanese export market is cautiously optimistic owing to local demand. “Most suppliers are still holding prices firm and slightly higher, anticipating higher steel production in Japan this month after the maintenance period. Also, domestic bulk sales locally have increased quite a bit,” a source said. SteelOrbis’ assessment for ex-Japan H2 scrap has improved by JPY 500-1,000/mt ($4.5-9/mt) over the past week to JPY 45,000-46,000/mt ($409-418/mt) FOB.
Though there has been some increase in ex-Japan scrap prices, overall sentiment in the South Korean market is still far from optimistic. Hyundai Steel has announced that it will reduce its local scrap procurement prices for its Incheon and Dangjin plants as of September 7 by KRW 10,000/mt ($8.64/mt). Also, Dongkuk Steel has decreased its local scrap purchase prices by KRW 10,000/mt at its Incheon plant. Further local scrap price cuts have been announced by Daehan Steel and YK Steel, by KRW 10,000/mt for all grades as of September 4.