Both major South Korean steel mills Hyundai Steel and POSCO have not announced new bids for Japanese scrap for more than a month now. They are also not purchasing ex-US scrap, instead focusing on buying domestic scrap which is also on a downtrend in terms of prices and is more than enough for South Korean mills right now. A producer commented, “The South Korean market is still weak.”
Over the past week, Hyundai Steel reduced its domestic A weight scrap prices at its Incheon, Dangjin and Pohang plants by KRW 10,000/mt ($7.78/mt) to KRW 672,000-685,000/mt ($521-531/mt), while Dongkuk Steel’s prices for the same grade is now at KRW 672,000-685,000/mt ($521-531/mt) following the KRW 10,000/mt ($7.78/mt) decrease at its Incheon plant. Following the failed Kanto tender in Japan yesterday, a source from a mill stated that a downtrend is likely to be seen in South Korea in the coming period.
A SteelOrbis source reported that indications for ex-US bulk HMS I scrap offers to South Korea are standing below $530/mt CFR this week, a sharp decrease from the $570-580/mt CFR levels which were defined as indicative two weeks ago. Following the nosedive observed in the international scrap market, it was already anticipated that US suppliers would reduce their offers to Asia.
According to the Korea Development Institute’s (KDI) monthly economic report, “Asia's fourth-largest economy (South Korea) has been gathering recovery momentum on robust growth in the service sector, but the business sentiment has been hit by policy uncertainties in major economies and continued global supply chain disruptions. The economy remains on a recovery path following the easing of Covid-19 social distancing measures, but downside risks are expanding as growth of exports and investments slows due to deteriorating external conditions.” Meanwhile, according to Bloomberg, “Japan and South Korea are among the countries set to join the Indo-Pacific Economic Framework, a US-led regional grouping President Joe Biden is expected to unveil later this month.”
$1 = KRW 1,289.15