South Korea: Ferrous scrap imports increase 16% m-o-m in Aug'21

South Korea recorded ferrous scrap import volumes of 0.5 million tons (mn t) in Aug'21, up by 16% m-o-m against 0.43 mn t in Jul'21, as per data maintained with SteelMint. Import volumes have shown an uptick owing to healthy construction steel demand since the beginning of the second half of the year.

Japan continued to be the largest supplier to South Korea, at 0.37 mn t, followed by Russia and the US at 0.08 mn t and 0.04 mn t respectively.

On a y-o-y basis, South Korea's ferrous scrap imports surged 92% from 0.26 mn t in Aug'20.

Market overview

• Imports from Japan rise: The bulk of August volumes originated from Japan at 0.37 mn t, an increase of 37% as against 0.27 mn t in the previous month. Demand for imported scrap from the Korean mills increased owing to their increased demand for high-grade scrap (Shindachi-bara) which was offered by Japanese suppliers to fulfill their requirements.
  
  
• Imports from Russia up: Scrap imports from Russia rose by 60% to 0.08 mn t in Aug'21 from 0.05 mn t in Jul'21. Russian volumes delivered in August jumped as previous months saw stronger purchases from South Korean steelmakers resulting in a constant rise in Japanese scrap prices which made Korean mills to prefer Russian scrap over Japanese material.
  
  
• South Korea's imports from US fall: Scrap import volumes from the US dropped by 50% to 0.04 mn t in Aug'21 as against 0.08 mn t in Jul'21.
  
  
• Japanese scrap export prices fell in Jul'21: SteelMint's monthly average price assessment for Japanese H2 scrap exports has come down by JPY 917/t ($8/t) m-o-m to JPY 47,583/t ($432) FOB in Jul'21.
  
  

Outlook

South Korea may prefer booking scrap from major countries like Japan and Russia due to improved steel demand from the second half of the year. On the other hand, South Korean steel market is doing well enough and can perhaps see better steel production in the coming months.