• South Korean buyers back away from deep-sea market amid higher prices.
  • Another price rise announced by Tokyo Steel.
  • Bearish sentiment in Chinese steel markets weakens domestic and import scrap prices in China.
South Korea
Offers for deep-sea cargoes to Vietnam were heard at around $560-565 per tonne cfr for HMS 1&2 (80:20) this week, while some offers to Bangladesh surpassed $600 per tonne cfr on Thursday October 21.

Firm deep-sea offers were not heard to South Korea this week, but sources estimated on Friday that offers would be at least $555 per tonne cfr Korea for deep-sea HMS 1&2 (80:20).

With deep-sea markets on a hot streak, more activity was witnessed in the Japan scrap market for Korean buyers this week.

A bid by a South Korean steelmaker for H2 was heard at ¥54,500 ($478) per tonne fob Japan on Thursday, up by ¥2,500 per tonne from the mill's previous bid of ¥52,000 per tonne fob one week before.

A second South Korean steelmaker had bid at ¥57,500 per tonne cfr for H1:H2 (50:50) scrap at the start of the week. Japan-origin shredded in bulk was heard sold late last week at ¥65,000 per tonne cfr South Korea and a transaction earlier this week was heard at ¥66,200 per tonne cfr Korea, sources said.

Sources said that freight costs ranged from ¥4,000-5,000 per tonne from Japan to South Korea this week depending on destination and load port.

Fastmarkets’ price assessment of steel scrap H2, Japan origin, import, cfr main port South Korea was ¥59,000-60,000 per tonne on Friday, up from ¥56,500-58,500 per tonne a week earlier.

The Japan domestic scrap market got another boost on Friday after Tokyo Steel announced its seventh buy price increase in October, with the Tahara mill raising its prices by another ¥500 per tonne.

Spot prices for steel scrap imported into China continued their downtrend amid bearish sentiment dominating the ferrous complex on Friday, according to sources.

Bids for imported HRS101-grade steel scrap into China were at $520-530 per tonne cfr north China on Friday, whereas the offers for heavy scrap (HS) from Japan were at $630 per tonne cfr China, sources said.

Fastmarkets’ calculation of the steel scrap, index, heavy recycled steel materials, cfr north China was at $530.83 per tonne on Friday, down by $4.17 per tonne from a day earlier.

The most-traded rebar and hot-rolled coil futures contracts on the Shanghai Futures Exchange ended their day trading sessions lower by 6.54% and 3.67% respectively on Friday.

Major Chinese steelmakers in Jiangsu province lowered their buy price for domestic scrap by 80 yuan ($12.51) per tonne on Friday.

“Jiangsu, Jiangxi and Guizhou provinces are still under electricity usage restrictions. We’ve learnt that some electric-arc furnaces in those regions have suspended production or reduced production, which is pressuring domestic scrap demand. The weak finished steel markets were also weighing down scrap prices,” a Chinese scrap industry analyst told Fastmarkets.

Fastmarkets’ weekly price assessment for steel scrap heavy scrap, domestic, delivered mill China was 3,710-3,780 yuan per tonne on Friday, down by 60-80 yuan from a week earlier. Disregarding value-added tax, that puts the China domestic scrap price at $505-514 per tonne.

“China’s steel market is very weak now. For example, China can pay at most $640-650 per tonne cfr for billet today, and this is down by around $60 per tonne compared with several days ago. So, it’s easy to understand why most buyers have no interest in importing scrap. The arbitrage window [for scrap] has closed,” a trading source based in Singapore told Fastmarkets.