South Korea: Hyundai Steel Cuts Bid for Japanese Scrap by USD 9

As per recent reports, South Korean leading EAF steelmaker, Hyundai Steel has lowered open bids for Japanese scrap by another JPY 1000/MT (USD 9) again this week on account of the continued downtrend of Japanese domestic scrap prices. In bids presented today for Japanese scrap, the company has reduced H2 bids to JPY 31,500/MT (USD 281), FOB Japan against JPY 32,500/MT, FOB bids presented during last week.

Hyundai steel had resumed bidding for Japanese scrap on 27th March after a gap of 2 months and has since then continued the downtrend by lowering the bids consecutively for around 3 weeks period.

Hyundai steel is the largest buyer of Japanese scrap which imports around 2.5 MnT scrap every year comprising around 30% of total Japanese yearly scrap exports. Hyundai’s bidding for Japanese scrap is considered to be the benchmark for East Asian scrap market.

As per SteelDaily’s report, leading steelmakers in South Korea have recently lowered the domestic scrap purchase price by KRW 10,000-15,000/MT (USD 9-13) on weakened imported scrap prices.

Japanese scrap prices fall further – Japan’s leading steelmaker Tokyo Steel made 6th consecutive price cut in April ‘19 so far and reduced scrap purchase prices by JPY 500/MT at all plants effective from 18th April. Notably, H2 purchase price at Utsunomiya plant has hit the lowest price in over 18 months and now stands at JPY 30,500/MT (USD 272).

Participants anticipate that Japanese scrap prices have already been hit bottom and price cut seems limited further. Approaching Golden week holidays for 10 days starting from 26th April may keep production activities sluggish.

US scrap exports to South Korea hit record high in Mar’19 – US scrap exports to South Korea hit a record high witnessing a flurry of bulk cargoes arrived in Mar’19. As per data maintained with SteelMint, South Korea imported 611,856 MT ferrous scrap in Mar’19, down 6% M-o-M against 651,714 MT in Feb’19. US supplied 243,597 MT occupying 40% share, on the other hand, the largest exporter Japan observed a sharp decline of 42% M-o-M supplying 267,973 MT in Mar’19.