Import scrap prices in South Korea have continued to go down this week with the major steel producer Hyundai Steel announcing another decrease in ex-Japan scrap bids by JPY 1,000/mt. The main focus of South Korean producers is still on local procurement or buying Japanese scrap at lower prices, while ex-US trading has been halted as suppliers have not been flexible, at least so far. Given the slow demand in most sales destinations in Asia like Vietnam, Taiwan and Bangladesh, Japanese scrap suppliers will have no other choice but to follow the bids of South Korean buyers.
Hyundai Steel has cut its bid for Japanese H2 grade scrap to JPY 47,800/mt ($356/mt) FOB, down by JPY 1,000/mt or $7/mt from that reported a week ago. The buyer’s price idea for H1/2 (50:50) from Japan has been released at JPY 48,300/mt ($360/mt) FOB.
The move by Hyundai Steel follows the drop in local scrap prices by Tokyo Steel earlier this week by JPY 1,000-1,500/mt to JPY 47,500-50,000/mt ($354-373/mt), depending on the mill.
As a result, the SteelOrbis reference prices for ex-Japan H2 scrap have posted a further drop, down by JPY 1,000-3,700/mt over the past week to JPY 47,800-48,300/mt ($356-360/mt) FOB. The lower end of the range represents the latest Hyundai Steel bid, while the higher end of the range reflects offers to Vietnam, which, however, even despite the sharp decrease, have failed to attract customers. Local sourcing is preferred by most Asian customers at the moment.
Hyundai Steel has also dropped bids for HS scrap by JPY 1,000/mt or $7/mt over the past week to JPY 51,300/mt ($382/mt) FOB and has released its shredded bid at JPY 50,800/mt ($378/mt) FOB after a long pause.
Ex-US bulk HMS I offers to South Korea have remained high, at around $430/mt CFR, while bids would be at $400/mt CFR at the highest, according to sources. “I believe suppliers are still standing firm, but soon they’ll start to panic if things don’t turn around in their favor. Then, we may see a significant price drop,” a South Korean source said regarding ex-US offers.
$1 = JPY 134.32
