Japanese No2 HMS prices rebound to JPY 38000 FOB level in Korean deals

TEX reported that transaction prices of No2 HMS have rebounded to a level of JPY 38,000 per tonne FOB in ferrous scrap exports out of Japan to South Korea in the wake of South Korean steelmakers' resumed moves to negotiate anew for Japanese ferrous scrap with positive bids.

South Korean steelmakers such as SeAH Besteel Corp, Daehan Steel Mill Co and Dongkuk Steel Mill Co collected offers to purchase Japanese ferrous scrap one after another last week. As a result, Daehan Steel firmed up is purchase of No2 HMS at around JPY 38,000 per tonne FOB. Also, Dongkuk Steel made a bid of JPY 38,200 per tonne FOB for No2 HMS by January 31st 2011. Meanwhile, trading company Posteel made a bid of JPY 42,000 per tonne FOB for P&S steel scrap in the fourth week of January. Posteel is a subsidiary of integrated steelmaker POSCO.

On their part, though, Japan's ferrous scrap suppliers indicate no hasty moves to firm up new export deals for shipments to South Korea. They believe that the current Korean bids for Japanese ferrous scrap are short on attractions, given the going FAS prices in the Tokyo Bay area. Besides, they see a strong possibility that transaction prices of Japanese ferrous scrap exports will further advance after the lunar New Year holidays in Asia.

In the third week of January 2011, Hyundai Steel Co made a bid of JPY 38,000 per tonne FOB for No2 HMS from Japan, down by JPY 500 from the earlier bid. Then, transaction prices of No2 HMS declined to around JPY 37,500 per tonne FOB. Even information circulated early last week that a new Japanese export deal of No2 HMS had shaped up at JPY 37,000 per tonne FOB for South Korea.

At the time, South Korea's various steelmakers as a whole looked set to hold back on new purchases of Japanese ferrous scrap after increased arrivals of domestic ferrous scrap at their works thanks to local dealers' realization sales before the lunar New Year holidays. Accordingly, there were enhanced signs of a continued downturn in Japan's ferrous scrap export market for new deals.

(Sourced from TEX Report Limited)