Japan Ferrous Scrap Export Increases for South Korea

Main importer of Japanese ferrous scrap shifted from China to South Korea. The export decreased significantly for China, the previous largest importer of Japanese ferrous scrap by 2004, while has increased bound for South Korean electric furnace steel makers, such as Hyundai Steel Industry, Dongkuk Steel Mill and Chang Won Specialty Steel, and POSCO, the integrated steel maker to import Japanese new cutting ferrous scrap regularly. Japanese dealers especially expect the export increase for Hyundai Steel which plans the expansion of electric furnace production in Dangjin plant.Japanese ferrous scrap export has increased with steady scrap generation in domestic market under economy improvement. The export increased by around 5% to 5.29 million tonnes in January-August 2006 from the same period of 2005, which could hit yearly record at present pace. Major scrap dealers keep constant export for another reason to balance supply and demand in domestic market.China was the biggest importer of Japanese ferrous scrap in Northeast Asia, which imported 10.22 million tonnes in 2004, and regularly contracted Japanese ferrous scrap import. However, Chinese import decreased by 30% to 2.93 million tonnes in January-May 2006 from the same period of 2005, when cost merit decreased for Chinese steel makers by the surge of scrap price. China is currently decreasing the scrap import with the increase of domestic scrap generation and material shift to iron ore.South Korea imported ferrous scrap mainly from U.S.A. before but recently shifted to Japanese scrap. Especially Hyundai Steel, the largest importer clearly changed the policy to purchases more scrap from Japan. The firm imported 100,000 tonnes of ferrous scrap at Inchon plant in September, most of which was from Japan. The import from Japan also increases at Dangjin plant. POSCO is a major importer of Japanese new cutting scrap. The amount of Japanese new cutting scrap export exceeded 400,000 tonnes in January-August 2006, which increased by above 4 times from the same period of 2005 and most of which seemed for POSCO. POSCO would keep large amount purchase of new cutting scrap as long as the firm maintains high operation.