Though South Korea’s scrap importers have been cautious in purchases over the past week, they have decided to purchase Russian scrap with minor price changes. Offers from Japan have posted a rapid increase, and so customers have been looking for alternatives.
At least two deals for 5,000 mt in total of Russian A3 scrap have been signed this week at $250-254/mt CFR South Korea for July shipment, while negotiations for some additional volumes are ongoing. The previous deal for scrap of the same origin was concluded at $250/mt CFR last week.
At the beginning of this week, some tonnage of ex-Japan H2 scrap was sold to South Korea at JPY 24,500/mt ($224/mt) FOB. This level is JPY 500/mt ($4.6/mt) higher than offers heard late last week and JPY 1,000/mt ($9.2/mt) above the previous contracts signed more than a week ago. Moreover, since this transaction most suppliers have increased offer prices further, seeing demand in the local market and from other Asian customers, from Vietnam in particular. For now, South Korean customers can hardly achieve even JPY 25,000/mt ($229/mt) FOB from Japan, and so they have been looking for supplies from other sources.
The overall supply volume has been limited in South Korea and demand has been reduced as well due to steel production cuts.
