South Korea: Steel Mill Signs another Contract for USA Bulk Scrap Import

South Korean steel mills have been witnessing increased booking for USA scrap successively since last two months. Another contract has been signed by South Korean steel mills for imported bulk scrap from USA. As per updates, Hyundai Steel has booked 48,000 MT of HMS 1 scrap from USA through a contract signed last week. The expected delivery for this is scheduled in early July and the contract price is reported at USD 362.5/MT, CFR South Korea.

Another South Korean leading steelmaker Dongkuk steel had already contracted for US bulk scrap last month. Dongkuk steel’s last contract for USA HMS 1 was concluded at slightly higher prices than the current contract price (at USD 363/MT) in Mar’18.

Hyundai Steel concludes its first contract for USA scrap in last five months - Hyundai has witnessed its first contract for US scrap since last five months in 2018. Over the easier and faster availability of scrap from largest supplier Japan, South Korean steel mills remained less inclined towards USA scrap. Also, the domestic scrap supply and consumption in South Korean local market have surged sharply this year as against last year. Because of which scrap imports from US remained low earlier this year and US witnessed sharply declined scrap exports during Jan-Apr’2018 to South Korea. However, the scenario seems to have changed now.

Demand for Russian scrap plunged amid high prices - The contracts for Russian scrap from South Korean importers remained sluggish since last two months. Russian scrap prices remained very high and unstable although global and domestic prices sharply moved down during the month of Apr’18. Hyundai steel had contracted for minor volumes in early April even the prices for Russian A3 grade scrap were as high as USD 368/MT, CFR South Korea then.

Current offers for the A3 grade from Russian suppliers remain in the range of USD 370-380/MT, CFR South Korea which seems very high to get accepted in the market. Amid the tightened supply for HMS scrap and lowering supply from Russia, Steel mills like Hyundai and Dongkuk have been trying to find new alternatives for Russian scrap.

According to the market participant, Hyundai steel alone needs around 40,000-50,000 MT of Russian scrap per month. The sharp slowdown in the purchases of Russian scrap has been witnessed as A3 prices stood too expensive as compared to global scrap prices. Thus, South Korean steel mills look to fulfill the gap of Russian scrap with USA HMS bulk scrap imports.

-Inputs from SteelDaily