South Korean Steel Mills Book Russian Scrap
As per updates received, in a recently concluded purchase, South Korean EAF steelmaker, Dongkuk Steel has booked 10,000 MT of A3 grade scrap from Russia at USD 287/MT, CFR South Korea. This price is around USD 7-8/MT less than the last contract for Russian scrap by South Korean steelmakers, which was signed for USD 294-295/MT, CFR in June’19.
Another leading Steelmaker, Hyundai Steel was heard to be under negotiation with Russian suppliers for 16,000 MT of A3 grade scrap at around USD 285/MT CFR, however the confirmation on the same is yet to be received from company officials.
Japanese scrap prices likely to rise on tight supply - With Japanese scrap market looking to have reached the bottom after observing sharp downtrend for the past 3 months, inquiries for Russian and US scrap are picking up by South Korean steelmakers, who are to diversify their scrap import sources and trying to hold Japanese scrap prices from recovering sharply in the short term.
Notably, Hyundai Steel has not revised its bid for Japanese scrap since 5th July, when it had lowered its bid for H2 scrap to JYP 27,000/MT (USD 251), FoB Japan, while suppliers from Japan have raised their offers for H2 to above JPY 28,000/MT, FoB level, finding resistance from the South Korean buyers as buying interest remains low.
It is reported that with Japan’s bulk export price of H2 scrap to Vietnam currently standing in the range JPY 29,000-30,000/MT (USD 270-279) FoB, the Japanese suppliers expect that offers to South Korea and Vietnam should be higher, which will in turn help the domestic market, however with South Korean buyers holding their bids for now, the likelihood of a buyer-seller standoff is high in the coming days.
Meanwhile, Japanese domestic price indexes have stopped falling for the first time since early April’19 as Japan lron & Steel Association’s index remained unchanged on a weekly basis, indicating stability in domestic scrap prices.
source: SteelMint
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