South Korean steel producer SeAH Besteel has shared bids for Japanese shredded scrap. Market sources report that this grade is not widely available in the local South Korean market, and hence it is logical for the producer to seek it from Japan. As SteelOrbis previously reported, South Korean steelmaker Hyundai Steel has halted production at its Dangjin plant due to a workers’ strike. Market sources report that POSCO has also been facing low product demand. “There is a very sluggish market right now in South Korea,” a source reported, adding, “Domestic scrap flow is also on the low side.” Domestic scrap prices in South Korea increased up to mid-February, by a total of KRW 30,000/mt ($21/mt), market sources report. However, South Korean producers are now hesitant to accept higher levels despite the slower scrap flow to their yards. “They might think that, if they increase the price again, they will make all the suppliers in the domestic market think it is time to decrease the flow to mills so that they can get more money from the mills,” a South Korean source reported.
SeAH Besteel has shared bids for Japanese shredded grade scrap at JPY 47,000/mt ($318/mt) CFR. This level indicates FOB-based prices for Japanese shredded scrap are at around JPY 44,000/mt or $298/mt, with freight between South Korea and Japan being at around JPY 3,000/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 40,000-41,000/mt FOB or $271-278/mt FOB. This range is very similar to the Tokyo Bay FAS prices recorded late last week, though market sources report that Japanese suppliers are showing little interest to the bids as prices are expected to move up in the coming week.
$1 = JPY 147.70
