Korean Steel Makers Restart Purchase of Japanese Ferrous Scrap

South Korean steel makers restarted ferrous scrap purchase from Japan. Hyundai Steel and Daehan Steel contracted Japanese ferrous scrap at around 35,000 yen per tonne for H2 grade this week, according to Japanese large dealer. In East Japan, electric furnace steel makers are reducing scrap procurement due to low operations. Domestic supply and demand balance is loosening. Another dealer source pointed out U.S. ferrous scrap export price is around CFR 39,000-40,000 yen per tonne to East Asia, higher than Japanese ferrous scrap price. Japanese ferrous scrap price may not decline sharply if export negotiations continue to progress, he said.

Hyundai Steel contracted Japanese ferrous scrap at approximately 15,000 tonnes and Daehan Steel at approximately 6,000 tonnes. Hyundai Steel offered FOB 39,000 yen for new cutting scrap, higher by 4,000 yen than H2, while Japanese dealers offered above 40,000 yen. The background was that new cutting scrap generation decreased by operative down of automobile plants in Japan. Thus Japanese dealers could scarcely contract new cutting scrap export, according to Japanese several dealers.

Domestic ferrous scrap market price is weak. Around Tokyo, the market price is 28,500 yen for H2, 30,300 yen for H1 and 32,000 yen for HS. Local electric furnaces’ purchasing price downed by 2,000 yen to 34,000-35,000 yen for H2 from last week and some pay as high as 35,500 yen. Around Osaka, the market is under wait-and-see situation at around 29,000 yen for H2. Electric furnace steel makers pay 37,000-38,000 yen for H2.