According to market sources, a certain electric steelmaker of South Korea has made a bid of JPY 30,500 per tonne FOB this week for a new purchase of No 2 HMS from Japan, which indicates no change from the price level that Hyundai Steel Co proposed at the end of last week. The current environment makes it difficult to settle new deals of No2 HMS exports from Japan to South Korea.

South Korean steelmakers are in various moves this week for new purchases of Japanese ferrous scrap. Among them are Dongkuk Steel Mill Co, Daehan Steel Mill Co and SeAH Besteel Corporation.

Meanwhile, Japan's ferrous scrap suppliers are somewhat reluctant to negotiate new export deals of shipments to South Korea. Main factors are rebounded FAS prices in the Tokyo Bay area, backlogs of negotiated ferrous scrap exports and difficulties in chartering cargo ships anew for export shipments.

Under the existing circumstances, the Japanese suppliers are short on strength to negotiate new export deals of No 2 HMS at prices to meet what they settled last week. On the other hand, South Korean steelmakers are trying to get lower prices in new purchases of Japanese ferrous scrap. Therefore, the sellers and buyers are divided in price ideas on new deals.

As to high grades of Japanese ferrous scrap, the latest negotiated prices of exports to South Korea indicate a level of JPY 34,000 per tonne FOB for P&S steel scrap and that of JPY 34,500 per tonne FOB for Shindachi. An appropriate price level of No2 HMS could be JPY 31,000 to JPY 31,500 per tonne FOB for new export deals of shipments to South Korea, given a price spread of JPY 3,000 per tonne between No2 HMS and the two high grades, some Japanese suppliers point out.

(Sourced from TEX Report Limited)