South Korean Electric Furnaces Raise Ferrous Scrap Purchase Price by 15,000 Won/t

South Koran electric furnace steel makers are raising their purchase price for domestic ferrous scrap. Dongbu Steel raised the price by 15,000 won per tonne on Wednesday. SeAH Steel increased the purchase price by 15,000 won for new cutting scrap and by 20,000 won for below A grade on Wednesday. POSCO has already raised the price by 10,000 won at Gwangyang iron works and 10,000 won at Pohang iron works. Ferrous scrap generation is decreasing and ferrous scrap price is rising at overseas market. Hyundai Steel and Dongkuk Steel are expected to announce the hike within this week.

South Korean electric furnace steel makers have contracted less overseas ferrous scrap. In December, the scrap import represented below 500,000 tonnes, decreasing by more than 100,000 tonnes from usual months. Their scrap stocks are decreasing since rebar makers are increasing the production in and after December.

Major steel makers have raised the purchase price by near 100,000 won per tonne since November. Meanwhile, they raised the selling price of steel products by only 40,000-50,000 won for January shipment. They are negative against higher material cost but move to the hike in order to secure enough material volume.

Steel makers expect South Korean ferrous scrap export price rises when ferrous scrap shipping decreases by heavy snow in Europe and U.S. East Cost. Scrap supply is likely to tighten in South Korea.