South Korea – one of the largest ferrous scrap importer, imported 0.34 mn t in Feb’21, (up by 79% m-o-m), as per data recorded with SteelMint. South Korean mills have increased their bids for Japanese scrap in Feb’21 on global cues.
Factors influencing South Korea’s scrap import –
- Japan remains the top exporter with 72% share – Japan exported 0.24 mn t with 72% of share in South Korea’s scrap imports in Feb’21. Monthly volumes jumped by 71% m-o-m. SteelMint’s price assessment for Japanese H2 scrap export price rose slightly to JPY 42,050/t ($386) FoB in Jan’21 as against JPY 39,320/t ($361) FoB in Dec’20.The other major suppliers – Russia and USA both exported 0.04 mn t in Feb’21.
- Tokyo Steel slashed domestic scrap purchase price up to JPY 13,000 in Jan’21 – Japan’s leading EAF mill – Tokyo Steel had cut its domestic scrap price eight times in Jan’21 by up to JPY 13,000/t for all works. The company had lowered its purchase price due to the maintenance of its electric arc furnace (EAF)- Utsunomiya works in Kanto region.
- Recovery in domestic demand – South Korean steel-makers planned to ramp up steel capacity with an eye on growing domestic demand and stabilization in global steel prices due to a drop in exports by China. Towards early Feb’21 leading producers Posco and Hyundai Steel were seen advancing or deferring repair schedules to maintain production as demand from construction, automobile and shipbuilding sectors remains strong.
- Hyundai Steel resumes operations at Incheon plant – Hyundai steel has resumed operations in its 70 t and 80 t Incheon plant’s steel mill, which was shut down from Oct-Dec’20 on scheduled maintenance. The factories started to produce at full capacity by the end of Jan’21, as per SteelDaily report. It had raised bids for Japanese H2 scrap from JPY 40,000/t FoB in mid Dec’20 to JPY 42,000/t FoB in mid-Jan’21.
Outlook – South Korean mills are actively booking Japanese and US scrap on the back of recovery in domestic steel demand.
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