South Korea: Hyundai Steel Resumes Open Bidding for Japanese Scrap After 6 Months

South Korea's leading EAF steelmaker - Hyundai Steel has presented open bids for Japanese scrap and therefore resumed them after almost six months gap. As per updates received on this, Hyundai Steel has lowered bids for H2 scrap by JPY 500/MT (USD 5) against last weeks' contract price. Recent bids for H2 issued at Japanese Yen 28,500/MT (USD 260) on FoB Japan basis.

Grade-wise: The steelmaker placed bids for other low-grade scraps like H 1&2 (50:50) at JPY 29,000/MT (USD 264) and H1 at JPY 29,500/MT. Bids for medium grade scrap like HS and Shredded remained at JPY 33,500/MT (USD 306) and for high-grade scrap Shindachi Daichibara (SB) at JPY 36,500/MT (USD 333), FoB Japan.

Hyundai Steel had remained away from open bidding for Japanese scrap since Jul'18 amid shifting of interest to long terms contracts with US suppliers while the company continued purchasing Japanese scrap from the spot market as per its requirement.

What can we infer from Hyundai's bids?

According to reports, as soon as Hyundai resumed open bids the large volume of offers exceeding around 120,000 MT was placed in order to match ample supply generated since a long gap and the price levels varied according to each vendor. However, all offers remained mostly below JPY 29,000/MT levels which were the lowest contract prices two weeks' ago.

"Hyundai Steel is offering a price lower than the current market price and this seems to indicate that the downward trend of Japanese market likely to continue in the near terms" shared Japanese suppliers.

Hyundai Steel plant maintenance in Feb'19 - The steelmaker likely to witness maintenance activities at its factories including Incheon steel mill during 3rd-19th February. Company officials are expecting to reduce local scrap prices ahead of facility repair.

Local scrap inventories rose sharply this week - South Korean local scrap prices have moved down after achieving a short term peak amid increasing inventories. Recently, leading steelmakers have lowered prices by KRW 5,000-10,000 (USD 5-9) on downward pressure. Also, scrap inventories held by leading 7 EAF steelmakers increased sharply around 20% W-o-W to 147,000 MT from the previous week.

~Inputs from Steel Daily