South Korea: Dongkuk Steel Raises Bid for Japanese Scrap by USD 9/MT

After witnessing slow down in scrap purchase activities in last two weeks over Chinese New Lunar Year holidays, South Korean steel mills have returned to the market with increased bids for Japanese scrap by JPY 1000/MT (USD 9).

South Korea’s leading electric arc furnace steelmaker – Dongkuk Steel has raised its purchase prices for Imported Japanese H2 ferrous scrap. Its latest bid put was at Japanese Yen 35,500/MT (USD 332), FoB for H2 grade against its last bid reported at JPY 34,500/MT (USD 323), CFR.

Dongkuk Steel is one of the leading EAF steelmaker with an annual steelmaking capacity of 3.60 MnT and total annual production capacity of 8 MnT out of which 70% are Hot Rolled Products and 30% are Cold Roll Products. According to sources, it consumes around 4-5 MnT of scrap annually.

“Japanese scrap prices are expected to have bottomed out and many of the suppliers are anticipating that Japanese scrap is unlikely to fall from these levels.”- shared a source. Also, USD/JPY exchange rate has come down to around 107 from 110 in last two weeks. Thus following this Dongkuk steel could have raised the Japanese scrap purchase prices.

Hyundai Steel expected to place new bids for Japanese scrap today – South Korea’s another leading EAF steel maker Hyundai Steel is expected to place its fresh bids today. Participants foresee Hyundai steel to increase bids further. However, its last bid placed on 14th Feb was at JPY 34,000/MT (USD 318) FoB Japan for Japanese H2 grade scrap.

South Korean mills recently booked Russian scrap at high prices – South Korean steel mills heard to have purchased Russian A3 grade scrap recently at USD 365/MT, CFR. Hyundai steel contracted significant volumes while Dongkuk steel booked minor volumes at same price levels.

Global scrap prices soar high on strong demand – Largest importer of scrap Turkey has been witnessing series of scrap purchases at strong prices. Recently 3-4 cargoes booked at USD 358/MT levels for HMS (80:20) from Baltic suppliers. In a trade deal, an Izmir based importer IDC booked 30,000 MT cargo containing 14,000 MT HMS (80:20) at USD 358/MT, 14,000 MT Shredded at USD 363/MT and 2,000 MT Bonus at USD 368/MT CFR Izmir basis.