Japanese rally for scrap prices continues further amid strong demand. Recently Hyundai Steel has raised its scrap purchase bid however South Korean mills have already placed scrap purchase bids higher than the bid placed by Hyundai Steel.
South Korea’s leading electric arc furnace steelmaker – Hyundai Steel has raised its import prices for Japanese H2 ferrous scrap. Its latest bid put was at Japanese Yen 35,500/MT (USD 315), FoB Japan for H2 grade scrap against its last bid reported on 08th Dec which was at JPY 35,000/MT (USD 311) FoB Japan.
SteelMint learned from sources that few South Korean mills have already raised bids for Japanese H2 scrap. South Korean leading steelmaker Dongkuk Steel recently bought Japanese H2 scrap at JPY 39500/MT, CFR which implies that bid placed for Japanese scrap is at JPY 36,000 -36,500/MT (USD 320-324), FoB Japan thus trade sources are of the view that at the price gap of JPY 500-1000/MT it looks difficult if Hyundai Steel will be awarded the cargo.
Dangjin factory of Hyundai Steel met with an accident – Recently, Dangjin factory of Hyundai steel had witnessed an accident over some technical failures. Few workers died in this accident thus the factory would likely to stop its production for 1 or 2 weeks to pass. Hyundai Steel has around 3700/MT production capacity per day which is likely to get affected for ongoing few weeks. Which could result in fall in scrap demand for Hyundai Steel – shared a source with SteelMint.
Presently, Japanese scrap exporters are not interested to sell materials to Vietnam as the buying interest shown by Vietnam buyers is around USD 355/MT, CFR while price expectations are around USD 375-380/MT, CFR from Japanese sellers.
Japan’s leading EAF steel producer – Tokyo Steel raised scrap purchase prices for the third time in Dec’17. On 13th Dec the steelmaker had raised scrap purchase prices further by JPY 500/MT (USD 5) at all five works in Japan. Now H2 scrap fetches JPY 37,000/MT (USD 327) at largest work in central Japan-Tahara.
Japan’s domestic scrap demand remains strong as this is a peak construction season in Japan. Japanese traders justify the strong demand for scrap in the domestic market by incremental billet exports from Japan. Following this, the Hyundai Steel would have increased their domestic scrap purchases.
Trade wise –
1. South Korea’s special steel manufacturer SeAH has bought some parcel from Japan of busheling at around JPY 44,000/MT CFR (USD 391) as market participants expected these price levels.
2. A leading buyer from Taiwan recently bought containerized USA origin HMS 1&2 (80:20) at USD 320/MT, CFR.
3. South Korea’s ferrous scrap imports increased marginally by 4% M-o-M to 0.51 MnT in Nov’17 against 0.49 MnT ferrous scrap imports in Oct’17.
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