South Korean steelmaker POSCO has announced bids for Japanese scrap, while the producer’s domestic scrap purchase prices are set to decline KRW 10,000/mt as of tomorrow, May 22. POSCO is planning to resume operations at its blast furnace No. 4 at the end of June. The furnace is currently under maintenance. The hot rolled rolling plant No. 2 of POSCO is also under maintenances and the producer has also announced there will be maintenance works its Gwangyang and Pohang plants in June. Apart from POSCO, Hyundai Steel has cut production due to the planned maintenance works all its EAFs starting from mid-May and continuing until the end of the month.
POSCO has shared its bids for Japanese shredded scrap at JPY 57,500/mt ($368/mt) CFR. This level indicates that the FOB-based price for Japanese shredded scrap is at around JPY 54,500/mt ($349/mt).
A source at a major South Korean mill stated 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 50,500-51,500/mt FOB or $323-330/mt FOB.
Late last week, Japanese H2 scrap offers to Vietnam were in the range of $370-380/mt CFR. With freight costs being around $30-34/mt between Vietnam and Japan, H2 scrap offers were at around $330-346/mt FOB. At the time, the Tokyo Bay FAS-based prices for H2 grade scrap indicated that FOB prices were at JPY 51,000-52,000/mt ($327-334/mt) for this grade (with the exchange rate at $1 = JPY 155.88).
POSCO has also announced its consolidated financial results for the first quarter of 2024, reporting an operating profit of KRW 583 billion ($423.75 million), increasing by 91.8 percent compared to the fourth quarter of 2023 and decreasing compared to the operating profit of KRW 705 billion in the same quarter of 2023.
$1 = JPY 156.14