South Korea: Hyundai Steel's Scrap Purchase Price Falls Below 3 Year Low

Japanese Scrap purchase prices for South Korean mills have witnessed another sharp fall today, after South Korean major EAF mill, Hyundai Steel, booked Japanese H2 scrap at JPY 22,000/MT, down by JPY 1000/MT against last week's bids. Amid quick drop in export offers of Japanese scrap confirmed by a significant fall in Japan's both the export tenders' - 'Kanto and Kansai results, a further cut in prices by South Korean mills was widely anticipated.

This booking has pulled the price down to 3-year-and-4-months low levels, as prior to this, the bottom was achieved in November 2016, when the price had touched JPY 21,500/MT. Such is the level of collapse in the Japanese scrap market, that in just 2 weeks, Hyundai steel's purchase price has dropped by JPY 4500/MT, in comparison to JPY 26,500/MT levels observed in latter half of Jan'20.

The bids for other higher grades of Japanese scrap also have fallen sharply, with H1/H2 (50:50) standing at JPY 23,000/MT, Shredded, HS scrap and Shin Dachibara at JPY 24,500/MT FoB Japan.

It is reported that import of Japanese scrap to South Korean mills have picked up in activity, and South Korean buyers have bid for over 200,000 MT in total of Japanese scrap. Although Japan's Tokyo Steel has cut its Scrap purchase bids by JPY 3000-3500/MT in Feb'20 alone and lowered by over JPY 5000/MT in total since Jan'20, there are no strong indications in the market that the price trend has reached the bottom as yet, and further drop cannot be ruled out.

~ Inputs from SteelDaily