POSCO International invests 20 billion won to secure steel scrap supply

POSCO International is investing 20 billion won to establish a procurement system to supply 500,000 tonnes (t) of steel scrap annually to POSCO. The company leases the latest equipment to small and medium-sized scrap companies in Japan, processes the scrap into high-quality steel, and sells it to POSCO. This helps to reduce the financial burden on the scrap companies and stabilises their management.

POSCO International has already established four steel scrap collection bases in South Korea. The company plans to add four more bases in the second half of this year. POSCO is also planning to build a new electric furnace with an annual production capacity of 2.5 million tonnes (mnt). This will increase demand for steel scrap, and POSCO International is well-positioned to meet this demand.

The market for steel scrap in Nagoya is flat. The market price for H2 scrap is JPY 33,500 to 34,500. Last week, Hyundai Steel raised its bid price for Japan scrap, and Totetsu's Tahara Plant followed suit. However, most other electric furnaces had already raised their bid prices, so their prices have remained unchanged.

Trading company sources say that both South Korean and Vietnamese buyers are not motivated to procure Japanese raw materials. Some electric furnaces will also undergo regular furnace repairs next month, which could lead to a temporary loosening of supply and demand. However, each company is committed to procuring production matches, and domestic demand is not strong.

Note: This article has been written in accordance with an article exchange agreement between Japan metal daily and SteelMint.