South Korean Mills Raise Bids for Japanese Scrap Further

South Korea’s leading electric arc furnace mill, Daehan, has raised its bid price for Japanese H2 scrap to Yen 36,000/MT FOB Japan, this is equivalent to USD 320/MT FOB Japan, a source mentioned to SteelMint.

Last assessment for the same grade for South Korea was done at Japanese Yen 34,000/MT FOB japan or equivalent to USD 302/MT FOB Japan before a weeks’ time.

Prices have increased in line with rising scrap prices in Japanese domestic market. On Monday, Japan’s Tokyo steel has raised scrap purchase prices by Yen 1000/MT at its Utsunomiya work while by Yen 500/MT at all other works in Japan. Thus as per new revision H2 at Tahara work fetches Yen 36,000/MT (USD 320) while Yen 35,500/MT at Utsunomiya work of Tokyo Steel in Japan.

South Korea is the largest scrap importer of Japanese scrap. At the same time, it stands as the second largest importer of scrap in the world after Turkey. Country imports around 5.5-6 million tonnes ferrous scrap every year. In CY16, South Korea Imported 5.64 MnT out of which 60% ferrous scrap was imported from Japan.

SteelMint recently reported that scrap inventories available with Korean mills have dropped by 50,000 MT last week.

The table below shows scrap inventory of Korean steel manufacturers delivered & shipped –

South Korea ferrous scrap imports rise marginally during Jan-Oct’17 –

South Korea’s ferrous scrap imports summed at 4.79 MnT during the period of first ten months in CY17.Imports have shown marginal growth by 2% Y-o-Y, as the ferrous scrap imports amounted to 4.70 MnT during the same time frame in last year (i.e. Jan-Oct’16).

South Korea holds highest share in Japan’s ‘Kanto Tetsugen’ ferrous scrap export tender –

Considering statistics of Japan’s monthly ferrous scrap export tender ‘Kanto Tetsugen’ during CY01 to CY16, South Korea holds highest 32% share followed by Taiwan (22%), China (18%) and Vietnam (18%) respectively. Monthly around 20,000 MT ferrous scrap gets exported through Kanto Tetsugen tender from Japan.

Trade Highlights –

1. H2 scrap fetches JPY 36,000/MT (USD 320) at Tokyo Steel’s largest work in central Japan-Tahara
2. Monthly ‘Kanto Tetsugen export tender’ for H2 grade scrap will be held on 12 Dec’17. Market participants are waiting for it for anticipating future prices.
3. Assessment for HMS 1&2 (80:20) for USA origin now stood at USD 346/MT, CFR Turkey after significant deals concluded recently which is up by USD 18/MT on W-o-W basis.