South Korea: Mills postpone Japanese imported scrap bookings

South Korea, one of the largest scrap importers, continues to suspend imports of Japanese scrap. The country's major steelmaker has sufficient inventories to be used till June 2022, as per a SteelDaily report.

The country reduced its scrap imports as the quantity of available domestic material is still high. Moreover, a large US ship berthed in May, creating no room to stock scrap any further.

Hyundai Steel, a key buyer of Japanese scrap, has stopped purchase of H2 scrap for the sixth straight week amid the current increased domestic scrap availability. A few other steelmakers have also hardly closed any transactions with Japanese scrap traders.

A Japanese trader said: "If Korean steel mills want to purchase, Japanese suppliers are likely to lower their offers to around JPY 60,000/t FOB. However, Korean steel mills want the offers lowered to around JPY 50,000/t."

Due to the wide gap in bids and offers, the low demand for Japanese scrap would continue for some time. However, if the steelmakers sign new contracts, there is a high possibilty that the volumes would be less.

Market participants are curious about how long this contraction in demand will last and how how will it affect the demand and supply of scrap in future.

Note: This article has been published in accordance with an article exchange agreement between SteelDaily and SteelMint.