South Korea’s leading EAF steelmaker – Hyundai Steel has suspended its bids for all grade of Japanese scrap for a second consecutive week. The company has stopped buying Japanese scrap amid sufficient inventories and ample numbers of contracts in hand since last two weeks. Hyundai Steel seems not interested to accept the price expectations from Japanese scrap suppliers which have moved up due to recent hike in domestic scrap prices in major regions like Kanto and Gulf in Japan .
On 22nd Jun’18, Hyundai Steel had presented bids for special grade H2 at Japanese Yen 33,000/MT (USD 297) on FoB Japan basis since then it remained unchanged for more than a months’ period over weakened demand for low grade scrap and H2. Although many offers were available from Japanese suppliers, South Korean steelmakers remained hesitant to buy at upward corrected prices.
Hyundai Steel is the largest buyer of Japanese scrap and imports monthly around 200,000-250,000 MT. Its import bidding is considered as a major indicator of the market direction in South East Asia.
Dongkuk Steel purchased H2 scrap at higher bids – On the other hand, South Korean another leading steelmaker Dongkuk Steel has purchased around 5000 MT of Japanese H2 at JPY 35,000/MT (USD 315), FoB Japan. Thus, bids presented by Dongkuk steel stood JPY 2000/MT higher than the Hyundai Steel’s last H2 bid at JPY 33,000/MT, FoB. Last week the steelmaker purchased H2 through negotiations at JPY 34,000/MT, FoB Japan for short period delivery in order to stabilize supply and demand for August.
South Korean domestic scrap supply has reduced now as prices are rising successively. However, Japanese scrap market is gaining movement in both local as well as exports markets. Resulting in the demand for Japanese scrap to turn strong which had remained weak for last few weeks in Japan along with other South East Asian countries.
Japan’s domestic and export scrap prices turn strong – Leading EAF steelmakers based in major producing regions like Kanto and Gulf region in Japan have recently raised purchase prices for domestic scrap in order to fetch more volumes amid ongoing summer and stricter quality control measures. Few of them are presently working with limited inventories of scrap in hand over tightened circulation in the market.
Now average H2 scrap prices for local steelmakers assessed in the range of JPY 35,500-36,000/MT (USD 319-324), FoB for Kanto region in central Japan Thus, Dongkuk steel’s bid prices are anticipated at good level according to current domestic prices and it is hardly anticipated that Hyundai could fetch a contract at earlier levels even in the upcoming days.
– Inputs from Steel Daily
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