Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

South Korean steelmaker Hyundai Steel has no plans to curtail output further, according to media reports. Refuting conjectures of further production cuts, the mill states it is largely unaffected by demand challenges amid COVID-19 outbreak. Especially since the domestic steel demand in the country is expected to rebound in Q3 (July-September) 2020.

At present, steel demand in South Korea remains hit with automakers and other downstream steel producers shuttering their operations in April. In response, Hyundai Steel had announced maintenance activities at some of its HRC production facilities. But the mill now states additional production cuts are not on the cards.   


Hyundai Steel has revised its 2020 hot-rolled coils (HRC) annual production target to around 700,000mt from the previous 1mn mt. The company operates with 3 blast furnaces and 1 Electric arc furnace (EAF).


In Q1 2020, Hyundai Steel posted a net loss of KRW88.6bn (US$72mn) from a net profit of KRW94.4 trillion a year ago.


South Korean ferrous scrap import prices up

Mills resumed bulk bookings for Japanese and US bulk cargoes. A major mill booked around 30,000mt Australian bulk ferrous scrap cargo comprising of #1 HMS at $255/mt fob Japan. While another steelmaker booked Russian ferrous scrap cargo at $239/mt cfr South Korea. 


Hyundai to open tender for Japanese scrap this week

Hyundai Steel is likely to open a tender for Japanese scrap this week. A drop in inventories is like to bring mills in the ferrous scrap markets with higher bids for Japanese scrap.  

In the bulk market, 50,000mt of Japanese #2 HMS traded at JPY23,000/mt fob Japan or JPY25,500/mt cfr South Korea. If domestic steel demand in South Koreas remains subdued, prices are unlikely to increase.

Leave a Reply

Your email address will not be published.