• South Korea buys Japanese scrap at higher prices
  • Limited scrap import interest in China due to electricity rationing
  • China local scrap prices hold firm after holiday
South Korea

South Korean import scrap prices have increased in recent days, with another price rise at Japanese mill Tokyo Steel's Utsunomiya works announced on Friday adding further pressure to the market.

The Utsunomiya mill will raise its buy prices by ¥2,000-2,500 ($18-22) per tonne depending on grade on Saturday; as of October 9, Tokyo Steel will pay ¥53,000 per tonne delivered for H2. That follows a rise of ¥1,000-2,000 per tonne brought in across all steelworks on October 6.

A deal for Japanese bulk scrap was sold to a South Korean mill at a price of ¥52,000 per tonne fob Japan in the week, sources said. After freight costs are added, the deal would work out at ¥56,500 per tonne cfr Korea, sources said.

Offers for H2 were heard at ¥53,000-55,000 per tonne fob Japan on Friday, sources said, but a Korean steelmaker source told Fastmarkets that these prices are too expensive.

Fastmarkets’ price assessment for steel scrap H2, Japan origin, import, cfr main port South Korea was ¥56,500 per tonne on Friday, up ¥3,000-4,000 per tonne from ¥52,500-53,500 per tonne last week.

With Japanese H2 prices on the rise, South Korean mills have increased their interest in deep-sea cargoes in the week. Although a rumored deal price of $515 per tonne cfr Korea for US-origin HMS 1&2 (80:20) was heard by some contacts earlier in the week, the deal could not be confirmed on Friday, with several sources saying it was just a rumor.

Fastmarkets’ weekly price assessment for steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr South Korea was $510-515 per tonne on Friday, up from $500-510 per tonne one week before.

China

The spot market for imported steel scrap into China was quiet on Friday October 8. The prices for the material remained rangebound on the first working day after the week-long Golden Week holiday in China, according to sources.

Bids for imported HRS101-grade steel scrap were heard at $515-525 per tonne cfr north China on Friday, against offers heard at $600 per tonne cfr China from Japan.

Fastmarkets’ calculation of the steel scrap, index, heavy recycled steel materials, cfr north China was at $530 per tonne on October 8, up by $0.31 per tonne from September 30.

“Buying interest is very limited. Overseas bulk [scrap] cargoes are too expensive for Chinese buyers. There is hardly anyone [who] can afford them, not to mention the pressure on scrap demand from the power usage restrictions,” a trading source based in Singapore told Fastmarkets.

“It is quite hard to import any scrap cargoes these days. There are large differences in acceptable price levels between buyers and sellers. Besides, we prefer to stay cautious when importing before we have better estimates of our future scrap demand under all the policies relating to steelmaking,” a mill source based in Hebei province said.

For the domestic scrap market in China, Fastmarkets’ weekly price assessment for steel scrap heavy scrap, domestic, delivered mill China was 3,690-3,770 yuan ($572-585) per tonne on October 8, unchanged from a week earlier. Disregarding VAT, that puts the China domestic scrap price at $498-509 per tonne.

“Recent gains in finished steel products have brought some confidence into the domestic scrap markets [but] the electricity rationing in some regions such as Guangxi province is still weighing on scrap demand,” a Chinese scrap industry analyst based in Beijing told Fastmarkets.