Asian Steel Makers Increases Ferrous Scrap Purchase from Japan

Asian steel makers in South Korea, China or Taiwan are expected to increase ferrous scrap purchase from Japan when Japanese ferrous scrap price is lower than US scrap price. US ferrous scrap export price to South Korea exceeded US$ 350 per tonne for the first time since August 2009 while reached US$ 355 to Taiwan. Japanese large dealer source said Asian steel makers may increase offers for Japanese cheaper ferrous scrap because Chinese ferrous scrap price is also rising.

Hyundai Steel, South Korean major steel maker, recently contracted ferrous scrap imports at CFR US$ 353-355 per tonne for HMS grade with US major shippers. On the other hand, Japanese ferrous scrap export price is expected to be around FOB 29,000 yen per tonne for H2 grade at new year contracts. The export price is lower than US export price despite of upsurge by 2,000 yen from December.

Distribution system in South Korea is locked by cold weather since January 4th. South Korean major electric furnace steel makers are reducing material inventories when scrap arrivals are regulated by over 70% compared with the usual volume.

South Korean steel makers raised the purchase price by 20,000-30,000 won (1,600-2,500 yen) per tonne but couldn’t increase the procurement volume. Consequently, the makers are likely to increase the purchase from Japan.

Taiwanese and Chinese steel makers are also increasing the purchase from Japan when US ferrous scrap price is surging.