South Korea: Hyundai Steel Resumes Bidding for Japanese Scrap after 2 Months

As per recent reports, South Korean leading EAF steelmaker Hyundai Steel has resumed open bidding for Japanese scrap after almost two months' time. In today's open bidding, the steelmaker has presented bids for H2 at JPY 34,000/MT, (USD 308) FoB Japan. While bids for Shredded scrap stand at JPY 38,000/MT (USD 344) and Shindachi Daichibara at JPY 39,000/MT, FoB Japan. The price gap between H2 and Shindachi scrap has narrowed to JPY 5,000/MT level against usual of JPY 7,000-8,000/MT.

Notably, as a result of the open bidding, the steelmaker was intended to purchase around 100,000 MT scrap but it received bids from Japanese suppliers for a total 150,000 MT. This indicates that the supply in Japan's market remains ample at the moment.

Since end of Jan'19, Japanese prices started moving up sharply and Hyundai Steel had stopped open bidding for Japanese scrap amid several bulk vessels scheduled for Feb-Mar-April deliveries.

Even in the beginning of this month, the company had expressed that it did not intend to purchase H2 at more than JPY 32,000/MT however, it couldn't conclude any contract at JPY 32,000/MT, FoB as Japanese suppliers remained hesitant to offer below market price which was hovering around JPY 34,000-35,000/MT, FoB.

Prior to this, the company had openly bid for Shredded scrap at JPY 33,500/MT and for high-grade scrap Shindachi Daichibara (SB) at JPY 36,500/MT, FoB Japan, on 23rd Jan'19.

Hyundai steel is the largest buyer of Japanese scrap which imports around 2.5 MnT scrap every year comprising around 30% of total Japanese yearly scrap exports. Hyundai's bidding for Japanese scrap is considered to be the benchmark for East Asian scrap market.

As Hyundai Steel has returned into Japanese market many steelmakers are likely to turn active for scrap booking from Japan. Moreover, Japanese domestic scrap prices in the Kanto region have seen softening with recent price cut made by Tokyo Steel. H2 price at Utsunomiya plant lowered by JPY 500/MT to JPY 34,500/MT despite a supporting factor as restocking ahead of Golden week holidays.

A Vietnamese trade source reported Japanese H2 is being offered in the range USD 340-345/MT, CFR Vietnam, marginally down by USD 5/MT against last week.

~Inputs from Steel Daily