Imported ferrous scrap prices in South Korea were on a downtrend this week amid the global COVID-19 pandemic. A drop in Chinese finished flat prices due to lowered futures in the steel market and subdued demand kept trades limited in South Korea. Ferrous scrap prices across global markets were under pressure due to negative sentiment. Prices declined in seaborne markets despite a continued shortage of containers.
Mills in South Korea booked bulk from Russia this week. Russian suppliers dropped their prices as the depreciation of Rubel against the US Dollar encouraged them to export. The RUB was valued at RUB77.93 on March 18 against the US$ from around RUB71.58 a week ago.
Hyundai Steel booked 90,000mt of Russian A3 scrap at $247/mt cfr South Korea, down by $14/mt from $262/mt cfr South Korea in the earlier deal concluded.
Additionally, on March 12, Hyundai Steel announced bids for Japanese #2 HMS at JPY22,000/mt fob Japan, down by JPY1,000/mt from the prior set of prices. Trades for #2 HMS concluded at JPY22,000/mt fob Japan. The company announced its price for HMS1&2(50:50) at JPY22,500/mt fob Japan and bids for shredded, HS (P&S) and busheling dropped to JPY24,500/mt fob Japan.The weekly Davis Index for containerised HMS 1&2 (80:20) settled at $238/mt cfr South Korea, down by $5/mt as mills shied away from bookings.
The weekly Davis Index for containerised shredded settled at $245/mt cfr South Korea, down by $8/mt, following a drop in US-origin west coast ferrous scrap prices by $5-10/mt early this week.
Domestic ferrous scrap prices in South Korea declined as trading thinned. The weekly Davis Index for domestic Heavy A del Incheon settled at KRW265,000/mt ($213/mt), down by KRW2,500/mt. The Davis Index for Heavy A settled at KRW255,000/mt del Pohang, also down by KRW2,500/mt from the prior Tuesday.
Mills have cut output to match the current subdued demand resulting in limited purchases of ferrous scrap. A few mills are likely to cut domestic scrap purchase prices by KRW10,000/mt in the next week as finished steel prices dropped by another $10/mt.
South Korean Steel Resource Association (KORES) has requested the government to provide tax-related relief amid the spread of COVID-19. The association sought emergency assistance as steel scrap businesses have been hampered drastically. Help including tax relief, compensation for workers’ wages, temporary suspension of loan repayment and relaxing a few trade restrictions.