Posted on 05 Jul 2021
South Korean mills are still paying a much higher premium for high-grade Japanese scrap, Kallanish notes.
A leading South Korean mill recently ordered Shindachi grade scrap, which is similar to Bushelling, at JPY 66,500/tonne ($598) cfr, while a Korean EAF mill booked H2 grade scrap at JPY 48,000/t ($431) fob, Korean trading sources say. Japanese trading sources say the prevailing price for Shindachi scrap is JPY 63,000/t fob and for H2 scrap at JPY 49,000/t fob. Freight cost from Japan to South Korea is estimated at JPY 4,000/t, up from JPY 2,500-3,000/t previously.
“The price gap between H2 and Shindachi grades has widened greatly over the past two months,” a regional trader says.
Prices are high for the higher grades but there is substantial quantity available, a Seoul-based trader says. He believes prices will remain strong because mills are using high-grade scrap to reduce carbon dioxide gas emissions. “This is one of the measures of the ESG programme,” he explains. In Hyundai's scrap purchase auction on 23 June, its bid for Shindachi grade scrap was JPY 7,000/t higher than for H2 grade scrap.
Source:Kallanish
