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Scrap import prices inch up in quiet East Asian market - 13 January 2012

The uptrend in scrap import prices continues in East Asia in tandem with a rising international scrap market. However, the approaching holidays associated with the Lunar New Year, plus uncertainty on whether sluggish finished steel prices can support higher scrap prices, continue to dampen buying interest.

Early this week Hyundai Steel booked two cargoes of bulk HMS 1 from the USA for March arrival at $473-474/tonne cfr Korea, trading sources tell Steel Business Briefing. They expressed surprise at the low transaction price.

The initial price for the end-December offer was $480/t cfr. A Seoul-based trader suggests Hyundai probably managed to secure this low price because it started negotiations some time ago. US-origin HMS 1 was booked at $469/t cfr Korea last month.

This week, Hyundai also secured Japanese-origin H2 grade scrap at ¥32,500/t ($422/t) fob, up from ¥31,500/t in end-December. Korean trading sources believe that, including other grades such as HS and Shindachi, more than 50,000 tonnes were booked. "Hyundai will be booking more Japanese scrap to make up for less domestic scrap collected due to the winter season," a Korean trader notes.

In Taiwan, containerised 80:20 scrap booking offer prices are around $455/t cfr. Recent deals closed at $450-453/t cfr Taiwan. “Some quantities were done but not a lot,” a Taipei trader says. Steel mills generally lacked confidence that rebar prices will be able to rise to meet increased scrap costs. They would prefer to wait until after the Lunar New Year holidays to better assess the market outlook, he adds.


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