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

Imported ferrous scrap prices in South Korea fell by $15-20/mt from a week ago on global cues. Prices mirrored the fall in Turkish ferrous scrap which declined by $10.37/mt. Oversupply of ferrous scrap in Asian markets also affected these prices. 


Demand for finished steel in South Korea was weak amid a slowdown in the construction sector. Consumption of hot rolled products also fell in the domestic markets as automakers have shut their production. The Coronavirus related lockdown in China has disrupted auto part supply to global markets including South Korea. 


The Davis Index for containerised HMS 1&2 (80:20) settled at $250/mt cfr South Korea, down $16/mt from the prior week. Trades were limited in the market. 


The Davis Index for containerised shredded settled at $261/mt cfr South Korea, down $23/mt from the prior week, in line with decline in US origin west coast ferrous scrap prices.

US-origin HMS 1&2(80:20) mixed scrap in bulk cargo was offered in the range $265-270/mt cfr South Korea, down $20-25/mt from the prior week.  


On Feb 3, South Korean steel mill Hyundai Steel altered its procurement regulations for Japanese origin scrap purchases. As per the new policy, Japanese suppliers will have to bear the cost of freight. The producer will now announce its procurement prices on cfr (cost and freight) basis rather than fob basis. Hyundai steel had booked #2 HMS at JPY25,500/mt fob Japan in late January.

The steelmaker has opened a tender for Japanese scrap purchase on Feb 5 with bids lower by JPY2,500/mt ($23/mt) since Jan 29 close of JPY23,000/mt fob Japan.


Bids for other grades like #1 HMS, shredded, Busheling and HS were at JPY24,000/mt, JPY25,500/mt, JPY25,500/mt and JPY25,500/mt on fob basis.  


Hyundai Steel booked 8,000-10,000mt of #2 HMS from Japan at JPY26,000-26,500/mt cfr South Korea, according to Davis Index sources. Japanese traders state prices may have reached their bottom in the week and are waiting for the monthly Kanto tender for February. The tender is expected to offer a clarity on price direction. 

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