South Korea: Ferrous scrap imports down by 31% m-o-m in November

In November, South Korea experienced a notable decrease in ferrous scrap imports, amounting to 197,593 tonnes (t). This reflects a 31% decline from the previous month's import volume of 285,414 t. Additionally, in a y-o-y comparison with the same period last year, there was a substantial drop of 36% compared to the 310,175 t recorded previously.

The decline in scrap imports can be attributed to the significant price cuts announced by steel mills. This resulted in domestic procurement being more cost-effective than importing, coupled with major mills maintaining substantial inventories despite stringent warehousing restrictions.

Country-wise imports

Imports from Japan: November saw a 29% decline in scrap imports from Japan to South Korea, dropping to 144,738 t from the previous month's 203,340 t. On an annual basis, imports from Japan fell by 42% compared to the same period the previous year, amounting to 247,735 t.

Imports from the US: Scrap imports from the United States experienced a significant 75% m-o-m decrease in November, reaching 10,031 t compared to October's 40,765 t. Y-o-y, imports from the US declined by 38%, down from 16,172 t in the corresponding month of the previous year.

Imports from Russia: Russian scrap exports to South Korea increased to 32,120 t in November, witnessed a 5% hike from October. However, on an annualised basis, there was a remarkable 155% increase in import volumes, rising from 12,579 t in November 2022.

Notably, there were zero imports from Australia and the Philippines in November.

Billet exports, and imports in November

In November, South Korea experienced a 19% m-o-m increase in steel billet imports, reaching 128,018 t compared to 107,511 t in October, according to Customs data tracked by SteelMint. Japan emerged as the primary exporter, contributing 117,323 t to the total. However, when considering cumulative import volumes for the period of January to November, there was a notable 13% y-o-y decrease. The total imports for this period amounted to 1.26 mnt, down from 1.45 mnt in the corresponding period of the previous year.

On the other hand, steel billets exports witnessed a substantial 61% m-o-m decrease in steel billet exports, totalling 25,588 t compared to 65,048 t in October. Japan emerged as the primary importer, receiving 22,377 t of steel billets from South Korea during this period. Looking at cumulative export volumes for the period of January to November, there was a significant 19% y-o-y drop. The total exports for this period amounted to 483,212 t, down from 598,393 t in the CPLY.

Outlook

Scrap imports into South Korea are anticipated to persist at lower levels due to the price differential between imported and domestic scrap, as well as a slowdown in the downstream sectors. For example, projections from the Construction Industry Research Institute indicate an expected decline of approximately 1.5% in construction orders for 2024 compared to 2023, contributing to the overall sluggishness in demand.