South Korea: Ferrous scrap imports increase by 17% in Oct on recovering finished steel demand

South Korea - one of the largest ferrous scrap importer, observed an increase in its scrap imports by 17% m-o-m to 0.35 mn t in Oct'20 as against 0.30 mn t in Sep'20, as per data maintained with SteelMint. Japan remained the largest supplier to Korea with import volumes being recorded at 0.27 mn t in Oct'20, up by 13% m-o-m. Imports from Russia and the USA were reported at 0.07 mn t and 0.01 mn t in Oct'20.

However, on a yearly basis, import volumes are down by 26% from 0.47 mn t during the same month in the previous year.

Quantity in mn t
Source: SteelMint stats & customs data

SteelMint's assessment for Japanese H2 scrap export stood at JPY 28,250/t ($271/t) FoB in Sep'20 as against JPY 27,000/t ($260/t) FoB in Aug'20.

Performance of major Korean companies - POSCO is positive to achieve the set target of 35.3 mn t crude steel output in CY'20 with improved demand for steel in various sectors. The company also expects to achieve 33.8 mn t product sales, this year. These targets are similar to the company's announcement made last quarter.

Hyundai Steel's production fell marginally to 4.53 mn t in Q3 CY'20 versus 4.69 mn t in Q2. Output fell due to mini-mill shutdown & demand contraction by bad weather. Sales increased to 4.85 mn t in Q3 vs 4.668 mn t in Q2 due to recovery in domestic & overseas automobile demand.

Outlook - Korean buyers preferred US bulk scrap due to its competitiveness with Japanese scrap, although delivery times are much longer. Year-end bullishness has contributed to buyers purchasing now to head-off potentially may increase prices in the future. Korean finished steel demand is expected to recover in H2 CY'20.