South Korean mills are paying for high-quality scrap

South Korean mills still pay a much higher premium for high quality Japanese scrap.

A leading South Korean mill recently ordered Shindachi scrap at ¥ 66,500 per tonne ($ 598), while a Korean EPP refinery booked H2 scrap at ¥ 48,000 per tonne ($ 431), Korean trade sources said. ... Japanese trade sources report that the prevailing price for Shindachi scrap is 63,000 yen per ton of key fob, and 49,000 yen per ton for H2 scrap. The cost of transportation from Japan to South Korea is estimated at 4,000 yen per tonne, up from 2,500-3,000 yen per tonne previously.

“The price gap between H2 and Shindachi has widened significantly over the past two months,” says a regional trader.

According to a trader in Seoul, the prices for the higher varieties are high, but there are significant quantities in stock. He believes prices will remain high because the mills are using high-quality scrap to cut carbon emissions. “This is one of the measures of the ESG program,” he explains. At an auction for Hyundai scrap on June 23, its rate for Shindachi scrap was 7,000 yen per tonne higher than for H2 scrap.