Higher Export Price Supports Japan Ferrous Scrap Market

Public Procurement Service of South Korea purchased Japanese ferrous scrap at CFR 28,500 yen per tonne to Pusan for H2 and 29,500 yen for H1 at the tender. The agency didn’t purchase US scrap to avoid higher price when the bid is more than US$ 350 per tonne.

US scrap export price is CFR US$ 335-340 per tonne to China for no.1 heavy melting scrap recently. US scrap composite price also rebounded in fourth week of November for the first time since September.

With the higher US price, South Korean steel makers shift to Japanese scrap. The South Korean agency’s purchase price represents around FOB 27,000 yen per tonne from Japan based on the recent tender CFR price. Hyundai Steel of South Korea also increased the Japanese scrap purchase price to FOB 26,500 yen, which is 500 yen higher than last week level.

The export price from Japan to South Korea is higher than Japanese market price. However, some industry source concerns the new export order for Japanese scrap could decrease from now when the scrap export contract was almost full for December shipment.