Over the past week, South Korean steel producer POSCO has cut its bids for Japanese scrap by JPY 1,000/mt or $4/mt. South Korean market sources report that Hyundai Steel has shut down its second facility in Pohang, in the southern region of the country, which follows POSCO’s decision to shut down its wire rod production line No. 1 as of November 19 after 45 years of operations. Sources report that these decisions were related directly to the lack of steel demand, but also to cheap imports of Chinese steel products. Market sources said that Hyundai Steel’s decision has had a stronger impact on the domestic scrap market, with local scrap prices continuing their downward trend over the past week in South Korea.
POSCO has shared bids for Japanese HS grade scrap at JPY 50,000/mt ($323/mt) CFR, down JPY 1,000/mt or $4/mt as compared to last week. The producers’ offers for shindachi grade scrap are at JPY 49,000/mt CFR or $317/mt CFR, $4/mt lower week on week.
POSCO also shared bids for Japanese shredded scrap, decreasing them by JPY 1,000/mt to JPY 48,000/mt ($310/mt) CFR, down $4/mt on US dollar basis, as compared to the previous levels announced last week. The JPY 48,000/mt level indicates that FOB-based prices for Japanese shredded scrap are at around JPY 45,000/mt or $291/mt, with freight between South Korea and Japan being around JPY 3,000/mt, down $4/mt week on week.
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 $265-272/mt FOB. This dollar-based H2 scrap price range on FOB basis is $4/mt lower as compared to last week.
$1 = JPY 154.56
