Following major South Korean producer Hyundai Steel’s bids for Japanese H2 scrap at JPY 43,000/mt ($310/mt) FOB on November 30, South Korean producers are relatively absent from the import scrap market. Market sources expect import scrap prices to move up but the upward momentum is not expected to be strong due to the lack of demand and fears of a negative economic situation. “With the current high interest rate at 3.25 percent, not only many people but also small and medium-sized companies are having financial issues,” a South Korean source commented. A major South Korean producer will test the market next week for Japanese scrap.
Today, December 9, the Kanto Tetsugen monthly export tender has been closed at the average price of JPY 47,568/mt ($346/mt) FAS. The highest bid today was JPY 47,710/mt ($347/mt) FAS or JPY 48,710/mt ($354/mt) FOB, SteelOrbis has learned that 3,000 mt of scrap was bought by a South Korean mill at this level. This level is significantly higher than Hyundai Steel’s bid shared on November 30. A source from a South Korean producer commented, “I am not too confident, but I think this uptrend will not last too long.” This comment is in line with Japanese sources’ ideas for the future trend of Japanese scrap.
The SteelOrbis reference prices for ex-Japan H2 scrap have increased from JPY 44,600-45,500/mt ($324-331/mt) FOB to JPY 45,300-48,710/mt ($329-354/mt) FOB. The lower end of the prices represents the deals closed by Taiwan this week, while the upper end is now represented by the South Korean mill’s purchase from the Kanto tender. The dollar equivalent of prices has increased by $5/mt on the lower end and by $23/mt on the upper end with the currency fluctuations taken into consideration.
Another major South Korean producer concluded a deal for Japanese shredded and shindachi scrap last week at JPY 51,000/mt ($371/mt) CFR.
Since November 29, Tokyo Steel has kept its prices stable for H2 grade scrap at JPY 45,000-46,500/mt ($327-338) delivered, depending on the plant. Hence, local Japanese scrap prices can be considered lower than export quotations, though some leading buyers of Japanese scrap in Taiwan say that the current levels offered to them can be considered expensive.
A South Korean source reports that indications for ex-US West Coast offers to South Korea are at around $400-410/mt CFR, moving sideways week on week.
$1 = JPY 137.44
