South Korean mills raise bid for Japanese scrap on supply tightness

South Korean mill - Hyundai Steel has raised bids for Japanese scrap by JPY 2,000/t ($19) this week, against last bids placed towards the beginning of the month, SteelMint gathered from its sources. The company has bid for only higher scrap grades and the bid price for HS is set at JPY 34,000/t level. Interestingly, no bids were put for lower grades of scrap. The company made bid according to the market price, however, the deal was not concluded at presented bid price.

South Korea's Dongkuk Steel and POSCO Steel have booked Japanese H2 scrap at JPY 30,500/t FoB basis towards the closing of last week, as per SteelDaily report.

Japanese scrap export offers to South Korea slightly up this week, in the range of JPY 30,500-32,000/t level for Japanese H2 grades scrap, while limited deals have been concluded at these levels. Whereas, Korean buyers are showing more interest in higher-grade scrap. Low scrap generation and increased scrap demand have lifted scrap prices worldwide.

SteelMint's assessment for Japanese scrap export offers stands at JPY 31,000/t FoB, up by JPY 2,000/t w-o-w.

Bids increase in Kansai scrap export tender- Japan's Kansai Iron and Steel Federation, an association of scrap dealers around the Osaka region, has concluded its scrap export tender this week for Nov'20. Japanese H2 was booked at an average price of JPY 30,670/t ($295), in contrast with JPY 29,310/t during the last tender in Sep'20, thus witnessing an increase of JPY 1,360/t ($13).

South Korea's ferrous scrap imports increase by 17% in Oct- South Korea observed an increase in its scrap imports by 17% m-o-m to 0.35 mn t in Oct'20 as against 0.30 mn t in Sep'20, as per data maintained with SteelMint. Japan remained the largest supplier to Korea with import volumes being recorded at 0.27 mn t in Oct'20, followed by Russia and USA.

Tokyo Steel announced two price hikes in scrap purchase this week- Japan's leading EAF mill- Tokyo Steel announced two scrap purchase price hikes this week. 1st hike made by JPY 500/t was applicable for all its five works. The 2nd hike announced yesterday for JPY 1,000/t is applicable to three works. The company is paying JPY 31,000/t ($298) for H2-scrap delivered to Tahara works and JPY 27,500 ($265) for H2 scrap delivered at its Utsunomiya works.

Tokyo Steel scrap purchase price effective from today (20th Nov'20)

Price in JPY
Source: Tokyo Steel report

Market sources expect prices to remain supportive in the near term.