As the shortage experienced in prime grade scrap supply continues in South Korea, South Korean mills are focusing on Japanese scrap to ease the situation. Competition between the major South Korean steelmakers have resulted in higher price levels.
SteelOrbis has learned that South Korean giant POSCO has increased its purchase prices for Japanese HS grade scrap by JPY 2,000/mt week on week to JPY 61,500/mt ($559/mt) CFR, which translates to around JPY 57,000-57,500/mt ($518-523/mt) FOB.
Hyundai also made a move to procure Japanese scrap. The new bids of Hyundai for shredded scrap are at JPY 55,000/mt ($500/mt) FOB, while its offers for HS scrap are at JPY 56,000/mt ($509/mt) FOB and offers for shindachi grade scrap at JPY 57,000/mt ($518/mt) FOB. The new prices indicate a JPY 1,000/mt increase for HS scrap and a JPY 500/mt rise for shindachi grade as compared to the levels recorded on June 11. No bids for H2 grade scrap have been reported from Hyundai yet, while bidding is set to be closed mid-day tomorrow, June 17.
Higher competition in Asia for higher grade scrap from Japan has been another reason for the higher prices in South Korea. Chinese customers were interested in purchases of ex-Japan HS scrap at up to $540/mt CFR, while most offers have reached $560-570/mt CFR.
S. Korean mills have been in a mood to restock ex-Japan high grade scrap after the deals for ex-US HMS I material done since last week. Dongkuk Steel concluded an ex-US deal towards the end of last week for 30,000 mt of HMS I scrap at $510/mt CFR. Also, another South Korean mill booked an ex-US scrap cargo in the same period for 32,000 mt HMS I at $515/mt CFR.
$1 = JPY 109.96