South Korean steel producer POSCO has kept its bids for Japanese scrap stable since November 29. A source at a major South Korean producer stated, “POSCO will keep their prices stable and continue to bid for Japanese scrap due to the low stocks on hand. We hear that one of their facilities, which produces hot metal, has problems and they have cut their HMR (hot metal ratio) and are consuming more scrap.” Meanwhile, the drop in the local South Korean market continues, with Hyundai Steel cutting its domestic scrap purchase prices once more this week for the plants in Dangjin, Pohang and Incheon. SteelOrbis observes that other producers are doing the same for local scrap purchases.
POSCO has shared bids for Japanese HS grade scrap at JPY 50,000/mt ($319/mt) CFR, stable week on wee, though, amid the fluctuation of the Japanese yen against the US dollar, dollar-based prices have dropped by $7/mt over this period. The producers’ offers for shindachi grade scrap are still at JPY 49,000/mt CFR or $313/mt CFR, dropping by $6/mt since last week.
POSCO has also shared bids for Japanese shredded scrap, which have remained stable at JPY 48,000/mt ($306/mt) CFR, decreasing by $7/mt as compared to the previous level. The JPY 48,000/mt level indicates FOB-based prices for Japanese shredded scrap are at around JPY 45,000/mt or $287/mt with freight between South Korea and Japan being around JPY 3,000/mt, down $6/mt.
Considering the gap between ex-Japan shredded and H2 scrap prices at around JPY 3,000-4,000/mt, this means indications for ex-Japan H2 prices for South Korea are at JPY 41,000-42,000/mt FOB or $262-268/mt FOB. This dollar-based H2 scrap price range on FOB basis is $5/mt lower as compared to last week.
$1 = JPY 156.77