Stating that domestic scrap is more attractive in price and sufficient in tonnages, both major South Korean steel mills Hyundai Steel and POSCO have decided not to announce new bids for Japanese scrap for the third week in a row. Despite falling price levels in the local scrap market, scrap flow in South Korea is still strong. South Korea has holidays on May 1, May 5 and May 8, which will overlap with Japan’s Golden Week holidays on April 29-May 8. A source from a South Korean producer said, “The Korean domestic scrap price is still dropping and flow is great, so we are still not in the market for overseas scrap.”
Accordingly, Hyundai Steel reduced its domestic A weight scrap prices at its Incheon and Dangjin plants by KRW 10,000/mt ($7.9/mt) on April 26 to KRW 692,000/mt ($550/mt), while another KRW 10,000/mt reduction has been announced today, April 29, for its Pohang plant to KRW 705,000/mt ($560/mt). Dongkuk Steel’s reduction for the same grade at its both plants in Incheon and Dangjin was KRW 10,000/mt ($7.9/mt) this week to KRW 692,000-705,000/mt ($550-560/mt).
A SteelOrbis source reported that indications for ex-US bulk HMS I scrap offers to South Korea are standing at around $570-580/mt CFR this week, which is $35-45/mt lower than the level recorded last week. Since South Korean mills are still staying away from imports, no deal at this level from the US has been disclosed to the market.
Tokyo Steel’s price levels announced on April 18 for H2 scrap were in the range of JPY 64,500-66,500/mt ($504-519/mt) delivered and have not changed since then. As SteelOrbis mentioned in its report on Taiwan, Japanese offers for H2 grade scrap to Taiwan stand at $545/mt CFR. With freight of $50/mt between Japan and Taiwan, the price is at $495/mt FOB or JPY 64,546/mt FOB.
As a result, the SteelOrbis reference price for ex-Japan H2 scrap has decreased by JPY 2,000/mt on the lower end to the range of JPY 64,000-68,000/mt ($490-521/mt) FOB. Dollar-based quotations have declined from the $515-531/mt level recorded last week amid the ongoing depreciation of the yen against the US dollar. It should be noted that the depreciation of the Japanese yen is in favor of scrap exporters, providing them with some room to reduce their export offers.
$1 = KRW 1,258.9
$1 = JPY 130.48