South Korean Middle Electric Furnaces Raise Scrap Purchase Price by 10,000-15,000 Won

South Korean middle-class electric furnace steel makers including Deahan Steel and Korea Special Shaped Steel raised their purchasing price for domestic ferrous scrap by 10,000-15,000 won per tonne on January 10th when major steel makers, Hyundai Steel or SeAH Steel, raised the purchasing price by 15,000-20,000 won last week. Middle-class steels’ purchasing price maintains higher than domestic major steels’ by 30,000 won by this hike. Major steels are likely to launch additional price hike next week when scrap supply is short in South Korea due to low import.

Ferrous scrap generation is said to be short by approximately 10 million tonnes per year against the demand in South Korea. Electric furnace steel makers actively import ferrous scrap and offset domestic scrap market price slightly lower than Japanese domestic market price. However, South Korean market price has steeply risen since mid December due to low import. Major and middle electric furnaces are in severe competition for scrap procurement.

POSCO raised the purchase price by 10,000 won per tonne at Gwangyang iron works and Pohang iron works on January 4th. Dongbu Steel and Hyundai Steel raised the price by 15,000 won on January 5th-6th. Deahan Steel increased the price by 10,000 won on Monday. Korea Special Shaped Steel and YK Steel followed the hike by 15,000 yen on Monday, too.

Middle-class electric furnaces’ price is now higher than major steel makers’ by about 30,000 won. Hyundai Steel and other major steels would implement additional price hike soon.