Having kept them stable last week, South Korean steel producer Hyundai Steel has decided to increase its bids for Japanese scrap on March 24. According to a South Korean source, the response to Hyundai’s bids for H2 scrap “was not too bad” last week and, as SteelOrbis reported earlier this week, the sentiment in South Korea regarding import scrap prices is mixed. Finished steel prices are not rising as fast as import scrap prices and are failing to support the uptrend. However, with the Japanese yen hitting a six-year low against the US dollar, Japanese sellers have started to increase their prices to compensate for their losses and this is reflected in South Korea, particularly in Hyundai Steel’s bid prices. Since other South Korean producers have already increased their bids for shredded, shindachi and HS grades, it can be observed that Hyundai is merely following their lead with this new rise.
As compared to the levels announced on March 17, Hyundai Steel has raised its bid for H2 grade by JPY 1,500/mt ($12/mt) to JPY 65,000/mt ($534/mt) FOB. On March 23, the main EAF-based steel producer in Japan, Tokyo Steel, announced its new price levels for H2 scrap in the range of JPY 63,000-64,000/mt ($518-526/mt), delivered. Hyundai Steel’s price is still above the local market prices, but the gap has decreased on the upper end after the recent revisions.
As a result, the SteelOrbis reference price for ex-Japan H2 scrap is now at JPY 65,000-66,000/mt ($534-542/mt) FOB, increasing by an average of JPY 1,000/mt week on week, decreasing $1/mt amid the depreciation of the Japanese yen against the US dollar.
As compared to March 17, Hyundai Steel’s bids for HS scrap have moved up by JPY 2,000/mt ($16/mt) to JPY 70,500/mt ($579/mt) FOB. South Korean producer POSCO’s bids for Japanese HS scrap are standing at JPY 74,000/mt ($608/mt) CFR or JPY 70,000-70,500/mt ($575-579/mt) FOB. With this move, the two producers’ bids are now at similar levels, securing higher grade scrap flow to each.
Hyundai Steel’s bids for shredded and shindachi bara grades have also increased by JPY 2,000/mt ($16/mt) and JPY 3,500/mt ($29/mt) week on week to JPY 70,500/mt ($579/mt) and JPY 72,000/mt ($592/mt), respectively, both on FOB basis. POSCO’s bids for shredded are at JPY 72,000/mt ($592/mt) on CFR basis, while SeAh Steel’s bids for shindachi bara grade are at JPY 75,700/mt ($622/mt) CFR. The freight from Japan to South Korea is still at JPY 3,500-4,000/mt ($29-33/mt).
$1 = JPY 121.6