South Korean customers have resumed purchases of Japanese scrap this week after suppliers cut prices as of the beginning of the week. No new deals have been reported for ex-Russia and ex-US scrap, but prices will have to drop in the next deals, following lower bids from customers.
A small deal for 3,000 mt of H2 scrap from Japan was signed at JPY 24,500/mt FOB early this week. Also, information about another contract for around 10,000 mt of the same grade at JPY 24,000/mt FOB has been disclosed later this week. But both contracts were signed in the first half of the week, while customers have stepped back later, aiming to get even lower prices soon. Some traders said that demand may be accelerated next week if prices go down below JPY 24,000/mt FOB, but any sharp increase in buying is not expected, taking into account lower steel production at EAFs in South Korea.
Hyundai Steel, one of the major importers, is going to cut imports of scrap by more than 1 million mt to 2-2.5 million mt in 2020, according to information circulated in the market.
The workable level for Russian A3 scrap in South Korea has been at $250-260/mt CFR, down significantly from the latest contract at $269/mt CFR last week. No new deals reported in the market, with sources believing that new contracts can be signed closer to $250/mt CFR South Korea.
Last week, 32,000 mt of ex-US H1 scrap was traded at $282/mt CFR South Korea, but this week the nominal price level has slipped to $260-270/mt CFR.