SINGAPORE South Korean
steel producers might import less ferrous scrap due to the
weakening won against the U.S. dollar, but the cut in purchases
is likely to be only temporary, sources say.
"Imports will decrease in the
short term, but it will not go on for very long," a mill source
said April 9, noting that while the exchange rate may not be
the most favorable, not buying scrap simply isnt an
Escalating tensions between
North and South Korea have taken a toll on the latters
currency during the past week. On April 9, South Koreas
won was trading at about 1,140 won to a dollar, its lowest
level since July.
But the source said he expects
the current crisis between Seoul and Pyongyang to eventually
Another mill source said he saw
the weakening of the won as having very little overall impact
on the local steel market for now. South Korean mills import
scrap and export steel products, so the impact of the currency
depreciation on both sides will offset each other, he said.
These mills may even take a more
aggressive stance with their export pricing with the won/dollar
rate becoming more favorable to them, a Singapore-based trader
South Koreas Hyundai Steel
Co. has reissued an export tender to sell billet after skipping
one last week and could start considering bids in the region of
$540 per tonne f.o.b. given that the weakening won will make
Korean products more competitive in overseas markets, the
Last week, Hyundai Steel decided not to award the tender due
to unfavorable bids and was reportedly targeting a price of no
less than $550 per tonne f.o.b. at the time.
A version of this article
was first published by AMM sister publication Steel