South Korean steel producer POSCO has shared bids for Japanese scrap, reducing them by JPY 1,500/mt as compared to the levels recorded in late January. With the Japanese yen’s depreciation, dollar-based prices have moved down further. Ahead of the Lunar New Year holiday four days, domestic scrap prices in South Korea are once again decreasing. Meanwhile, Hyundai Steel has not shared bids for Japanese scrap since last August, though SteelOrbis hears that the producer is procuring scrap from its yards in Japan. A South Korean player commented “We [South Korean mills] have been fairly quiet in overseas markets due to the price gap between domestic and overseas scrap.” Also, several South Korean mills have scheduled maintenance works and some are even currently carrying out maintenance works. This situation is not expected to push scrap prices down. Market players report that, although finished steel demand is on the low side, scrap inventories are also low. One source stated, “Depending on the scrap flow after the holiday, we may see some buying from overseas to stock up.”
POSCO has reduced its bids for Japanese shredded scrap by JPY 1,500/mt as compared to the levels recorded on January 22 to JPY 57,000/mt ($382/mt) CFR, with another $13/mt drop observed in dollar-based prices. This level indicates FOB-based prices for Japanese shredded scrap are at around JPY 54,000/mt ($362/mt), again indicating a $13/mt decline.
A South Korean source at a major mill said the current gap between ex-Japan shredded and H2 scrap prices should be around JPY 3,000-4,000/mt. This means indications for ex-Japan H2 prices for South Korea are at JPY 50,000-51,000/mt FOB or $335-342/mt FOB.
$1 = JPY 149.21