The Japanese ferrous scrap export price to South Korea continued to increase amidst tight supply and rising demand.
According to market sources, South Korean Hyundai Steel is said to have increased its bid price for various categories of Japanese scrap in its purchase tender for the week. The company’s bid price for H2 grade scrap stood at Yen 20,800/mt FOB. The bid price for HS grade scrap was at Yen 22,800/mt FOB during the week. The bidding price for Shindachi grade scrap was at Yen 23,300/mt FOB. The above bid prices will be applicable to cargoes for shipment by mid-May. As per trading sources, the bid price of Yen 22,800/mt FOB is very much in line with expectations. Japanese and South Korean traders had earlier predicted that the South Korean mills are likely to bid H2 scrap at anywhere between Yen 20,500/mt FOB and 21,100/mt FOB.
Tokyo-based scrap traders believe that there are high chances that the H2 scrap export trade may hit the upper levels of Yen 21,100/mt FOB. The scrap prices have gone higher by approximately Yen 700/mt when matched with the previous week. Hyundai Steel had booked nearly 50,000 mt of Japanese scrap last week at around $19,900 /mt FOB.
Japanese mills fear that the rising bid prices for Japanese scrap may slow down the supply of scrap, as scrap collectors are likely to hold the supplies for the time being, in anticipation of better prices. Also, stagnant finished steel prices in domestic market may prevent mills from raising their scrap buying prices. Meantime, Tokyo Steel Manufacturing has announced that it has decided to increase its scrap purchasing prices by Yen 500-1,000 per mt at all its facilities with effect from March 23rd deliveries. The scrap purchasing prices at Utsunomiya works in north of Tokyo will now be Yen 16,500/mt.