For the fourth consecutive week, the Vietnamese steel market has been quiet. A Japanese source commented, “Vietnam is totally out of the market.” Next the Japan Kanto scrap export tender will be held on November 9 and players are waiting for the result. On the other hand, the situation in South Korea has also remained unchanged. Mills are still meeting their scrap needs from the local market as they are exerting pressure even on domestic scrap quotations.
Tokyo Bay FAS based prices for H2 grade scrap have decreased to JPY 49,000-50,000/mt ($332-338/mt) from JPY 50,500-51,000/mt ($343-347/mt) recorded last week. This new level is signalling 50,000-51,000/mt ($338-345/mt) FOB for this grade. The FOB and dollar-based prices have decreased by $9-12/mt since October 26.
In this situation, the SteelOrbis reference price for ex-Japan H2 scrap has moved down by JPY 1,000/mt over the past week to JPY 50,000-51,000/mt ($338-345/mt) FOB. Due to the fluctuation of the Japanese yen against the US dollar, dollar-based prices have softened by $1/mt on the lower end week on week, while the upper end has decreased by $8/mt.
Over the past week, Tokyo Bay FAS prices for HS have also moved down, by JPY 500/mt on the lower end to JPY 51,000-53,000/mt ($345-358/mt). The lower end has decreased by $5/mt on dollar basis week on week as the upper end has declined by $2/mt. Tokyo Bay FAS prices for shindachi scrap have decreased by JPY 1,000/mt on the lower end and by JPY 500/mt on the upper end to JPY 50,000-51,000/mt ($339-345/mt), resulting in an $8/mt decrease on the lower end and a $5/mt drop on the upper end.
No bids from South Korea for Japanese H2 scrap have been announced this week. The most recent bid from South Korean steelmaker Hyundai Steel for Japanese scrap were announced on October 5 and were at JPY 48,000/mt ($332/mt - exchange rate at JPY 144.51 to the dollar) FOB. Th energy price hike is taking its toll on South Korean producers, a source from a major mill said, adding “We’re expecting the same issue [a further rise in energy prices]. Our profit is going to drop significantly in the fourth quarter.”
While South Korean producers are reducing their domestic scrap procurement prices, SteelOrbis hears that POSCO is also limiting the intake per day. Domestic A weight scrap prices at Hyundai Steel’s Incheon, Dangjin and Pohang plants are in the range of KRW 555,000-567,000 ($391-399/mt), KRW 10,000/mt or $7/mt lower week on week. Meanwhile, Dongkuk Steel’s domestic A weight scrap procurement prices at its Incheon plant have also declined by KRW 10,000/mt ($7/mt) to KRW 567,000/mt ($399/mt).
$1 = JPY 147.00
$1 = KRW 1.417,57