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

Following high domestic prices and rising export offers for Japanese scrap, South Korean mill Dongkuk Steel has placed bids at JPY 37,500/MT, FoB.

South Korea’s leading EAF steelmaker – Dongkuk Steel has raised its purchase price for Japanese ferrous scrap recently. Its latest bid put yesterday for special H2 grade was at Japanese Yen 37,500/MT (USD 354), FoB equivalent to JPY 40,000/MT (USD 377), CFR as against its last bid reported at JPY 36,500/MT (USD 344), FoB.

Dongkuk Steel is one of the leading EAF steelmakers with an annual steelmaking capacity of 3.60 MnT and total annual production capacity of 8 MnT. According to sources, it consumes around 4-5 MnT of scrap annually.

Japanese H2 scrap bids presented by Dongkuk steel are JPY 500/MT (USD 5) higher than H2 scrap bids put up by Hyundai Steel at JPY 37,000/MT USD 349), FoB Japan presented on last Friday in South Korea.

Hyundai Steel raised Japanese H2 scrap bids twice this month on 5th Mar’18 and 9th Mar’18 witnessing the total rise of JPY 1500/MT (USD 14) against its bid which was at JPY 35,500/MT (USD 335), FoB Japan.

Also, in last two days, Japanese Yen (JPY) appreciated further by around 1.25% against USD. USD/JPY exchange rate stood to 105.9 today as against 107.2 on 13th Mar ’18.

Thus, following Dongkuk steel price hike and amid strong Japanese scrap export prices, Hyundai steel is also expected to increase Japanese scrap purchase prices in the near term.

Major steelmakers in South Korea like Hyundai, Dongkuk, SeAH, Daehan, YK and Korea Steel have raised domestic scrap purchase prices by KRW 10000-20000/MT (USD 9-18) in the last couple of days.

Strong Japanese domestic scrap prices –

Recently, Japanese domestic scrap prices increased further by JPY 500-1000/MT to around JPY 37,500-38,000/MT in major regions like Kanto, Osaka and Tokyo.

Japan’s Tokyo steel mill raised domestic scrap prices by JPY 500/MT at two of its works (i.e. Tahara and Utsunomiya) effective from 13th Mar’18. Now H2 scrap fetches JPY 38,000/MT (USD 358) at largest work in central Japan-Tahara. While the same grade fetches JPY 37,000/MT (USD 349) at Utsunomiya works in north Japan.

Most of the Japanese scrap suppliers are now eyeing for JPY 38,500-39,000/MT levels for H2 scrap on FoB Basis and expect prices to remain robust in coming days over strong scrap demand in Japan.