South Korea: Hyundai Steel Raises Bids for High Grade Japanese Scrap by USD 9/MT

South Korean steel mill, Hyundai Steel has raised bids for higher grade Japanese scrap by JPY 1000/MT for this week. While prices for low-grade scrap kept unchanged over easier availability from domestic markets.

South Korea's leading electric arc furnace steelmaker - Hyundai Steel has kept its import prices for Japanese H2 scrap unchanged for this week however, it raised prices for higher grade scrap like SB and Shindachi Press (Bushelling) by Japanese Yen 1000/MT (USD 9.45) w.e.f today (16 Mar'18) respectively. Its latest bids for Shindachi Daichibara (SB) scrap increased to JPY 43,000/MT (USD 406) and for Shindachi Press scrap to JPY 44,000/MT (USD 415) on FOB Japan basis respectively.

Prices for H2 grade scrap kept unchanged at JPY 37,000/MT (USD 349), FoB Japan. While prices for other low grades remained at JPY 37,500/MT (USD 354) for H1/2 (50:50), at JPY 40,000/MT (USD 378) for both Shredded and HS scrap respectively.

"Hyundai Steel raised bids over the requirement of high-grade scrap however, low-grade scrap can be easily fetched from the domestic markets thus remained stable in prices" shared a source.

Prior to this on 9th Mar'18, the steelmaker increased bids for all grades of Japanese scrap by JPY 500 (USD 5). Thus Hyundai Steel has witnessed third price hike so far for this month amid strong demand for high-grade scrap.

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 354), FoB equivalent to JPY 40,000/MT (USD 377), CFR on 14th Mar'18 as against its last bid reported at JPY 36,500/MT (USD 345), FoB in early March.

On 14th Mar'18, Hyundai Steel increased domestic scrap purchase prices for its Dangjin steelworks and Incheon factory by KRW 20,000/MT (USD 19) and by KRW 5,000/MT (USD 5) for its Pohang factory respectively. Thus, low-grade domestic scrap is easily available in the market and owing to which Hyundai steel would have kept prices unchanged for low-grade scrap.

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.

Also, in last three days, Japanese Yen (JPY) appreciated further by around 1.30% against USD. USD/JPY exchange rate stood to 105.8 today as against 107.2 on 13th Mar '18. However, Yen had appreciated by 4.7% in last two months' time which was trading at 111 against USD then.

High domestic and export scrap prices in Japan - Japan's Tokyo steel mill raised domestic scrap prices by JPY 500/MT at two of its works (i.e. Tahara and Utsunomiya) effective from 13th Mar'18. Now H2 scrap fetches JPY 38,000/MT (USD 358) at largest work in central Japan-Tahara. Most of the Japanese scrap suppliers are now eyeing for JPY 38,500-39,000/MT levels for H2 scrap on FoB Basis and expect prices to remain robust in coming days over strong scrap demand in Japan. On the other few of them foresee prices to have reached the short-term peak.