Fe Scrap Watch #48 - Ferrous scrap exporting price to rise above JPY25,000!
2016/04/18Now a few scrap dealers have not yet understood the situation.
Nobody expected the increase like this. Or, we should say nobody was able to expect such rises.
It had been expected that the significant increase in steel prices originated from China would end late March, but the assumption was completely wrong.
The price increase in Chinese steel products has entered into the second upward stage this week.
The price rises are large in all the product types and the hot rolled product price rose by more than $50 since the end of the last week. In fact, the market has entered into the second stage to rise sharply.
The price has increased by more than $150 from the bottom.
Chinese billet prices which could be the index for the ferrous scrap prices have also risen above $360.
It’s notable that the billet inventory in China has sharply decreased to 55% compared to that of 2015.
Along with this, the supply of Chinese billet has decreased sharply in Asia. Electric furnace steel manufacturers in other countries, who have been dependent for ferrous materials on the billet have started to buy local or exported scraps.
So, supply is not sufficient for the demand.
Hyundai purchased again
Hyundai, the Korean largest electric furnace steel manufacturer, gathered offers from suppliers this week and made a bid for HS at JPY24,000 on FOB basis.
The company is negotiating now, but is being faced with raising the purchasing price to buy all the offered quantities of 80,000 tons.
The offered prices are expected between JPY24,500 and JPY25,500 to rise above JPY25,000.
In Korea, rebar price increased sharply by more than JPY10,000/t last week.
Hyundai announced to have secured the materials up to the end of May, but the company continues to purchase the materials for May shipment this week.
The company seems to be desperate for the materials.
As US scrap deliveries take 2 and a half months or 3 months, they cannot wait so long in the current market situation.
Taiwan has also entered the market
Taiwanese buyers who have been waiting and seeing the market has started to purchase Japanese ferrous scrap as they are not able to purchase Chinese billet at all for the moment.
After Taiwan, Vietnam also….
Fierce battles for ferrous scrap are likely to be seen in eastern Asia.
→ Fe Scrap Watch #46 -Billet increased again! Not a temporary rise this time?
（Edited By O.Sasaki）