Steelmakers in South Korea and Taiwan are expected to negotiate for Japanese ferrous scrap in the next few days after a surge in domestic scrap prices due to higher bids for Kanto tender on Wednesday.
Containerized imported ferrous scrap prices in South Korea rose this week on the back of higher offer prices. Demand, however, is still under pressure with mills holding good levels of scrap inventories.
The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, settled at $286/mt cfr South Korea, up by $3/mt, with no deals heard at the index price.
Mills preferred to negotiate for Japanese bulk scrap over higher-priced US-origin material. Deals for Japanese shindachi were heard last week with Korean mill Seahbe buying at JPY33,500/mt cfr ($318/mt) or JPY31,500/mt fob and Hyundai purchasing at JPY32,500/mt fob or JPY34,500/mt cfr. Offers for the grade rose by JPY1500/mt cfr this week.
In the coming days, however, mills expect steel demand to improve both in the export and domestic market aided by billet demand in China and other Asian countries. Bids for billets rose by $10/mt on Wednesday to $460/mt cfr Southeast Asia with a 30,000 mt deal heard cfr China at the same price.
South Korean domestic scrap prices trended up on rising imported scrap offers. Except for Hyundai, most Korean mills increased domestic scrap prices by KRW10,000-20,000/mt ($9-18/mt) delivered Pohang this week. No deals in containerised or bulk were heard.
The weekly Davis Indexes for P&S 5ft, #1 HMS, and shredded rose by $14/mt, $5/mt and $9/mt to $309/mt, $293/mt, and $302/mt cfr South Korea, respectively.
South American suppliers offered HMS 1&2 (80:20) at $285/mt cfr South Korea on Wednesday up by $10/mt from the prior week.
Taiwanese mills continued to buy limited ferrous scrap cautiously. A few deals were heard at $290/mt cfr on Wednesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) Wednesday rose by $2/mt to $291/mt cfr Taiwan from the prior week.
Offers for US-origin HMS 1&2 (80:20) in FEUs were at $295-300/mt cfr and are expected to rise with an uptick in buying from Turkey. Despite limited demand, suppliers are raising offers and pushing up scrap prices.
In bulk, no deals were heard this week due to rising offers and higher bids for Kanto Tender.
($1= KRW1,112; JPY105)