Amid ample contracts available in hand and disparity between price expectations from Japanese scrap suppliers and bidding levels, Hyundai Steel has suspended bidding for Japanese scrap this week .
South Korea’s leading EAF steelmaker – Hyundai Steel has suspended its bids for all grade of Japanese scrap this week. Few Japanese suppliers offered scrap to Hyundai Steel yesterday at present market levels in Japan. However, Hyundai Steel remain not interested in buying at high prices amid lot of inventories and contracts in hand. It seems that it stopped bidding this week rather than buying excessively.
Last week Hyundai Steel kept bids unchanged for Japanese scrap. Bids for special grade H2 remained unchanged since last five weeks’ time at Japanese Yen 33,000/MT (USD 293) on FoB Japan basis. Price gap between bids for H2 and high grade scrap remains widened at JPY 8,000/MT. Bids for medium grade scrap like HS and Shredded were at JPY 38,000/MT (USD 344) levels and for high-grade scrap Shindachi Daichibara (SB) at JPY 41,000/MT (USD 365), FoB Japan.
Looking at large number of contracts available in hand for H2 it is also anticipated that Hyundai may stop purchasing H2 for next few days. Also, no inclination was shown by the company for paying more than JPY 33,000/MT, FoB levels for H2.
Hyundai Steel is the largest buyer of Japanese scrap and imports monthly around 200,000-250,000 MT. Its import bidding is considered as a major indicator of the market direction in South East Asia.
Bulk scrap vessel of Dongkuk Steel reported at Incheon works – A bulk scrap vessel comprising 32,000 MT of ferrous scrap which was booked from SIMS metal, USA has arrived at Incheon works of Dongkuk steel on 17th Jul’18. Thus, scrap inventories at Dongkuk Steel are also considerable at present.
Hyundai steel heard to have stopped purchasing domestic scrap for this week and it extended its purchasing local scrap along with Dongkuk steel in South Korea.
Although Japanese scrap market is turning strong currently in the western Japan and Kanto region along with improving demand from few importing countries, the prices are less likely to remain supportive for longer period. Recent price hike of Tokyo Steel is made due to heavy rains and logistic issues but a steep rise is hardly expected in the upcoming summer, and it is a fact that the demand for H2 will narrow down further.
Now average H2 scrap export offers from suppliers assessed in the range of JPY 34,500-35,500/MT, FoB for Kanto and Gulf regions in Japan. Which may perhaps come into pressure with strong resistance shown by South Korean steelmakers.
– Inputs from Steel Daily
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