South Korean Hyundai Steel Cuts Bid for Japanese Scrap by USD 9

South Korea's leading EAF steelmaker - Hyundai Steel presented bids for Japanese scrap yesterday. According to reports, the steelmaker has slashed bids for Japanese scrap by JPY 1,000/MT (USD 9) as against last weeks' report following which Japan's domestic scrap prices likely to decline further.

Hyundai Steel has placed bid for Japanese H2 scrap at JPY 30,500/MT (USD 269), FoB as against last weeks' level at JPY 31,500/MT, FoB. However, the contract volumes could not confirm till the publication of this article.

In line with this, bids for high grade Shindachi (SB) scrap placed at JPY 38,500/MT (USD 340), FoB, as against JPY 39,500/MT, FoB levels last week. Price difference between Japanese H2 and Shindachi grade remains at JPY 8,000/MT (USD 71).

Hyundai Steel is the largest buyer of Japanese scrap and imports monthly around 200,000-250,000 MT scrap. Its import bidding is considered as the major indicator of the market direction in South East Asia. However, it had remained away from presenting bids for Japanese H2 for almost 4 months' period amid high high Japanese prices and bulk bookings from US and Russia.

South Korean steel mills turned cautious about the market weakness amid ample inventories available. Falling Japanese scrap prices along with sharp decline in Chinese product price have resulted in falling distribution volume from retailers in the country.

Japanese scrap prices yet to reach bottom - Following successive price cuts from domestic EAF steelmakers in Japan and weak buying interest from South Korean steel mills likely to result in further fall in Japanese scrap prices. Suppliers believe that they do not see a bottom yet even after sharp fall in the prices. Japan's leading EAF mini-mill - Tokyo Steel fetches H2 scrap at JPY 33,000/MT (USD 291) for Utsunomiya works and JPY 32,000/MT at Tahara works.

According to price indices reported by Japan Iron and Steel Association, domestic scrap prices continue downtrend for a successive fifth week in Japan. The average price index for H2 scrap stands at JPY 30,000/MT (USD 265) down by JPY 600/MT on W-o-W basis. For Kanto region H2 stands at JPY 31,300/MT (down JPY 700/MT), for central region at JPY 29,200/MT (down JPY 300/MT) while in Kansai region fell JPY 900/MT to JPY 29,600/MT.

~ Inputs from SteelDaily