Right after South Korean producer Hyundai Steel returned to the Japanese scrap market with significantly lower bids, POSCO has also announced its bids for Japanese scrap. South Korean producers were out of the import scrap market for a long time, observed to be returning only for Japanese scrap. “For now, we are not interested in Russian or US origin scrap. We believe there is some little room for another decrease for Japanese scrap,” a source at a major South Korean producer commented.
South Korean producer POSCO has reduced its bids for Japanese HS scrap to JPY 64,000/mt ($504/mt) CFR, and its shredded scrap bids to JPY 63,000/mt ($496/mt) CFR. The previous bids of the mill were announced on April 1, and were at JPY 77,000/mt ($629/mt) CFR and JPY 75,500/mt ($617/mt) CFR, respectively, when the JPY rate was at 122.4 to the dollar. The freight between South Korea and Japan is around JPY 3,500-4,000/mt ($28-31/mt). As a result, POSCO’s bids for Japanese scrap are still above Hyundai’s. Yesterday, May 26, Hyundai’s announced bids for HS scrap at JPY 58,500/mt ($460/mt) FOB and for shredded at JPY 57,000/mt ($449/mt) FOB.
Meanwhile, SteelOrbis has learned that Hyundai Steel has been bidding for around 100,000 mt of H2 scrap at the level of JPY 53,500/mt ($421/mt) FOB announced yesterday, but it decided not to buy all of the tonnage since another slight decrease in Japanese scrap is considered possible.
As a result, the SteelOrbis reference price for ex-Japan H2 scrap has remained stable today at JPY 53,500-57,000/mt ($421-449/mt) FOB.
On the other hand, taking into account the Japanese scrap prices, indications for ex-US bulk HMS I scrap offers to South Korea are at around $490/mt CFR, which also means a sharp decrease from the $530/mt CFR level which was defined as indicative two weeks ago.
Another important development is Toyota announcing another cut in its automotive production for June, by approximately 100,000 units, due to the semiconductor shortage. Toyota’s decision will result in lower tonnages of high grade scrap in the Japanese market.
$1 = JPY 127.04