Amid increasing scrap inventories and recent appreciation of JPY against USD, South Korean steel mill, Hyundai Steel has kept bids for Japanese scrap unchanged for this week. However, demand for Japanese scrap is still strong in the markets.
South Korea’s leading electric arc furnace steelmaker – Hyundai Steel has kept its import prices for Japanese scrap unchanged for this week (23rd-30th Mar’18). As per latest price update today (23rd Mar’18), Hyundai Steel has kept prices unchanged for all grades of scrap.
Hyundai Steel placed bids for H2 grade scrap again at JPY 37,000/MT (USD 353), FoB Japan which remained stable since last three weeks. While prices for other low grades like H1/2 (50:50) remained at JPY 37,500/MT (USD 358) and for both Shredded and HS at JPY 40,000/MT (USD 382) respectively. Its latest bids presented for high-grade scrap like Shindachi Daichibara (SB) and Shindachi Press remained same as last weeks’ bids at JPY 43,000/MT (USD 410) and at JPY 44,000/MT (USD 420) on FOB Japan basis respectively.
Rising scrap inventories with South Korean mills – Amid increasing scrap inventories and large numbers of Japanese contracts for scrap in hand, Hyundai Steel has kept bids unchanged for this week. Few trade sources are expecting price hike to be short-lived.
Prior to this in the last weeks’ bids presented, Hyundai Steel had raised bids for high-grade scrap like SB and Shindachi Press by JPY 1000/MT over the requirement of high-grade scrap, however, bids for low-grade scrap remained unchanged as it was easily available from the domestic markets.
According to reports, Hyundai Steel and Dongkuk Steel booked around 57,000 MT and 48,000 MT of Japanese scrap at bids placed in the last week. While both South Korean steelmakers are currently operating at its maximum daily outputs and have increased daily output for finish steel to 6000-9000 MT with inventories increasing at 3000 MT levels per day.
JPY appreciates against USD – In last seven days, Japanese Yen (JPY) appreciated further by around 1.41% against USD. USD/JPY exchange rate stood to 104.7 today as against 106.2 on 16th Mar ’18. However, Yen had appreciated by 5% in last two months’ time which was trading at 110.2 against USD then.
Hyundai Steel is one of the largest buyers of Japanese scrap. According to market participants company imports yearly around 500,000-600,000 MT scrap from Japan.
Japanese H2 scrap bids placed by Dongkuk Steel mill in South Korea are still JPY 500/MT (USD 5) higher than H2 scrap bids put up by Hyundai steel. Dongkuk Steel put bids for special H2 grade at JPY 37,500/MT (USD 358), FoB equivalent to JPY 40,000/MT (USD 382), CFR.
High domestic and export scrap prices in Japan – Japan’s largest mini-mill Tokyo steel raised domestic scrap prices by JPY 500/MT at Utsunomiya works effective from 20th Mar’18. Now H2 scrap fetches JPY 38,000/MT (USD 362) at largest work in central Japan-Tahara and JPY 37,500/MT (USD 358) at Utsunomiya works in Japan.
According to Japan Iron and Steel Association, domestic scrap prices in Japan increased for third consecutive weeks in Japan. Average price index for H2 scrap increased to JPY 35,200/MT (USD 336) up by JPY 300/MT on W-o-W basis. For Kanto region, H2 assessed at JPY 36,500/MT (+ JPY 700/MT W-o-W) and for central and Osaka regions at JPY 34,300/MT and JPY 34,900/MT respectively.
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