South Korea: Ferrous Scrap Imports from Japan Up 10% in August

South Korea - world's 2nd largest ferrous scrap importer after Turkey has witnessed rise in scrap imports by 8% M-o-M in Aug'18. After registering fall in scrap imports from Japan in July, South Korean imports have turned up with increasing production activities and rising Japanese scrap exports in August. However, Hyundai Steel kept away from bidding for Japanese scrap throughout August on disparity between price expectation and bid levels.

As per recently released customs data, South Korea imported 531,346 MT ferrous scrap in August as against 491,319 MT imports recorded in Jul'18. On yearly basis, imports rose 23% Y-o-Y in Aug'18 against 432,586 MT ferrous scrap in Aug'17.

Japan remained largest ferrous scrap supplier to South Korea - Japan exported 330,312 MT, up 9% M-o-M as against 304,046 MT ferrous scrap occupying 62% share of total scrap imports to South Korea. Scrap export prices from Japan remained firm and demand for Japanese scrap especially for H2 and low grade remained weak. However, South Korean steelmakers continue buying high grade scrap from the spot market without bidding for it.

United States remained second largest supplier witnessing stability in scrap exports to South Korea. Its exports recorded at 89,067 MT in Aug'18. With limited impact of export ban observed Russia remained third largest exporter and supplied 75,183 MT (down 7% M-o-M). New Zealand supplied 21,900 MT ferrous scrap recording significant growth as against earlier months. While other major exporters like United Kingdom and Philippines witnessed nil scrap exports in Aug'18.

Outlook - South Korean scrap imports from US may increase in September and October. Major Steelmakers like Hyundai and Dongkuk Steel have been booking bulk scrap cargoes over higher Japanese scrap prices. While demand for high-grade Japanese scrap may remain strong on increasing demand for special steel manufacturing.

South Korean scrap imports climb 10% during Jan-Aug'18 - During first eight months of CY18, South Korea imported 4.13 MnT ferrous scrap, up by 10% Y-o-Y as against 3.74 MnT ferrous scrap imports recorded during the same period last year. United States witnessed sharp rise of 46% Y-o-Y in scrap exports to South Korea during Jan-Aug'18.

According to World Steel Association, the country produced 42.24 MnT crude steel during first seven months of CY18 which has climbed by 3% Y-o-Y. South Korea produced 6.18 MnT crude steel in Jul'18 while finish flat exports from the country remained at 1.98 MnT, up 2% M-o-M in Aug'18.

Country wise South Korea ferrous scrap imports -

Quantity in MnT,
Source: Customs Data