South Korean steelmaker Posco announced bids for Japanese scrap purchase Tuesday through a spot tender, learnt Davis Index. The steelmaker raised its bids to procure at least 7,500mt ferrous scrap for the deliveries latest by Sep 31 shipments.
The steelmaker bid at JPY28,500/mt cfr Fo Kwangyang for around 3,000mt shredded scrap. For over 2,500mt of HS grade scrap Posco bids at JPY29,000/mt cfr Fo Kwangyang, while bids for shindachi or #1 busheling, 2,000mt were heard at JPY29,500/mt cfr Fo Kwangyang. The steelmaker has resumed higher grade scrap purchases on improving auto demand.
The recent bids by Posco has pushed Japanese ferrous scrap prices higher. The bids remained higher by at least JPY1,500/mt than the current market levels. The equivalent #2 HMS can be gauged at JPY25,000/mt fob Japan from JPY24,000-24,500/mt fob Japan on Tuesday.
Early this week, another leading steelmaker in South Korea booked #2 HMS at JPY24,000/mt fob Japan.
In the Kanto region, ferrous scrap suppliers raised their offers successively for the second week. The Davis Index for #2 HMS had settled at JPY23,000/mt ($215/mt) fob Japan on July 15, up by JPY1000/mt from the prior week. However, prices have moved up by another JPY1,000-1,500/mt in last seven days.
South Korean steelmakers had successively lowered their bids for domestic scrap amid high inventories since the last five weeks. Many steelmakers preferred domestic scrap over imported scrap to cut costs amid limited steel demand in the country.
Domestic scrap prices are expected to have reached a short-term bottom, said a trader. The weekly Davis Index for domestic Heavy A Tuesday fell by KRW5,000/mt to settle at KRW285,000/mt ($238/mt) del Incheon, while the index in Pohang settled at KRW270,000/mt delivered, down by KRW5,000/mt from the prior Tuesday.