South Korea: Hyundai Steel Slashes Bid for Japanese H2 Scrap by USD 4

South Korea's leading EAF steelmaker - Hyundai Steel has lowered bids for Japanese scrap again from the last week today. According to reports, bid for Japanese H2 stands at JPY 29,500/MT, FoB which has come down by JPY 500/MT (USD 4) as against the last week's report of JPY 30,000/MT, FoB.

According to prices maintained with SteelMint, it is the first time since the first week of Aug'17, Hyundai Steel's import bids for Japanese H2 have fallen below JPY 30,000/MT, FoB levels. H2 bids were last seen at JPY 29,500/MT on 21st Jul'17.

Hyundai Steel is the largest buyer of Japanese scrap and it seems that the steelmaker is purchasing Japanese scrap in the range of 30,000-40,000 MT per week.

Despite continuous price cuts, there is still a possibility of additional price correction in upcoming days on falling Japanese and South Korean domestic scrap prices.

Hyundai Steel aims to import around 3.5 MnT ferrous scrap next year - Hyundai Steel seems aggressive to bolster its overseas ferrous scrap procurement lineup next year. It plans to raise its consumption of ferrous scrap to total 10 MnT next year. Out of which 6.5 MnT would be South Korean domestic scrap and 3.5 MnT would be imported scrap.

Recently Hyundai Steel has contracted for total 45,000 MT of US scrap equivalent to HMS 1 at USD 325/MT, CFR South Korea. Prices have moved down by USD 10/MT as against the last deal concluded for US bulk scrap at USD 335/MT for January shipment.

Rising high-grade scrap imports - Until last year, Hyundai Steel's total scrap imports accounted for 60% of Japanese H1 and H2 scrap, however, this year high-grade scrap (including Shindachi and HS) is expected to account for 60% share. Rising consumption for special steel wire manufacturing at Dangjin works could have resulted in shifting of low-grade scrap imports to high-grade scrap imports this year.

Strengthening long-term contracts - The steelmaker has strengthened the systematic procurement of high-grade scrap by means of long-term and joint yards contracts in Japan. Amid the ban on Russian ferrous scrap exports, South Korean scrap imports from Japan has risen further and domestic scrap consumption soared sharply. Also, it plans to strengthen and stabilize US scrap imports next year.

~ Inputs from SteelDaily