SteelOrbis hears that there is a resistance from South Korean steel mills against current domestic and import scrap price offers. A source from a major South Korean producer said, “Demand is poor for steel. We have unscheduled maintenances and scheduled maintenances coming up.” The poor steel market situation in South Korea is the result of sluggish domestic demand. A source commented, “The economy is like skating on a thin ice with a hot blade.”
In this context, South Korean producers have not shared bids for Japanese scrap this week. According to one source, “They may need to buy for the future depending on the scrap flow in the domestic market. What is odd is with all the negative situation globally, suppliers that I spoke with are very confident that prices will go up.” While there is no new bid for Japanese scrap this week, Hyundai Steel had cut its bid for Japanese H2 grade scrap to JPY 47,800/mt ($356/mt with $1 = JPY 134.317) FOB last week.
This week, indications for ex-US bulk HMS I/II 80:20 scrap to South Korea stand at $405-410/mt CFR. Late last week, SteelOrbis reported that offers to South Korea for this grade were at around $430/mt CFR, with bids at $400/mt CFR at the highest, according to sources. While offer prices are now closer to South Korean producers’ target, a source said that there is a possibility of a price rise in the coming days.
For now, the SteelOrbis reference prices for ex-Japan H2 scrap have remained at JPY 47,800-48,300/mt ($341-344/mt) FOB. Due to the depreciation of the Japanese yen against the US dollar, dollar-based reference prices have indicated a $15-16/mt decline week on week.
$1 = JPY 140.25