News Room - Steel Industry

Japanese ferrous scrap export prices to South Korea continued to increase after leading South Korean EAF mill Hyundai Steel raised its bidding price in a recent purchase tender, sources in Japan and South Korea said Thursday.

South Korea's Hyundai Steel posted its bid for Japanese scrap at Yen 17,000/mt FOB ($149/mt) for H2 grade material, Yen 19,000/mt FOB for HS grade as well as shredded grade, and Yen 19,500/mt FOB for Shindachi grade.

In addition, the South Korean steel mill offered an extra premium of Yen 500/mt for bookings exceeding 6,000 mt, sources in Tokyo and Seoul confirmed Thursday. These orders were for cargoes for shipment by April 20.

Platts assessed its weekly H2 scrap price on Wednesday at Yen 16,500-16,800/mt FOB Tokyo Bay, up from the previous week's Yen 16,200/mt FOB.

The implied mid-point of Yen 16,650/mt was Yen 450 higher on week.

Hyundai's booking of Japanese scrap late last week was at Yen 16,500/mt FOB for H2 material, with an extra premium of Yen 300/mt for bookings exceeding 4,000 mt and Yen 500/mt for those exceeding 6,000 mt.

Traders are unclear how much tonnage the South Korean mill would be able to purchase at Wednesday's bid prices.

A Tokyo-based scrap trader was surprised over Hyundai's latest bid level. "We thought Hyundai would keep its target price unchanged. However, offers from the Japanese traders were much higher this time, so we believe the company had to lift its offer prices to secure the volume it requires," he said.

Japanese traders are currently aiming to sell Japanese H2 at the minimum of Yen 17,500/mt FOB, up Yen 500/mt from last week.

Another scrap trader in Tokyo said that as the supply of scrap for loading onto vessels for export has been tight, many traders are likely to only supply cargoes not exceeding 6,000 mt, so most deals would be taking place at Yen 17,000/mt FOB, without any volume extra charges.

"The bid prices are still lower than the Japanese traders' target prices so we wonder if Hyundai can secure the volume it expects to," he said.

"Hyundai is trying to increase its scrap procurement volumes from Japan after recognizing the jump in scrap prices in Turkey," a Seoul-based trader said. It was also likely that Hyundai purchased a lower volume than it had planned to last week, he added.