South Korea: Ferrous scrap imports increase by over 35% m-o-m in May'23

South Korea's ferrous scrap imports increased significantly to 311,983 tonnes (t), marking a 36% m-o-m growth in May 2023 compared to April's 229,809 t. However, imports decreased by 29% y-o-y in comparison to May 2022's figure of 437,704 t.

The increase in billet imports in May by 63% m-o-m can be attributed to the rising demand for steel within South Korea which also decreased billet exports from the country in May 2023. This heightened demand has reduced the availability of domestically produced billets, leading to a need for imports. Notably, Japan emerged as the major exporter of billets to South Korea in May, due to competitive pricing.

South Korean steelmakers are increasingly relying on imported scrap to meet their requirements. This reliance on foreign sources can be attributed to various factors, including cost-effectiveness and quality considerations.

Country-wise scrap imports

The country-wise data revealed fluctuations in imports from different countries, such as the m-o-m increase in imports from Japan, the decline in imports from the US, and the substantial growth in imports from Russia.

• Imports from Japan up m-o-m: Scrap imports from Japan witnessed a substantial m-o-m increase of 26% in May, making it the leading supplier of ferrous scrap to South Korea. The depreciation of the Japanese yen played a significant role in making Japanese scrap more attractive in terms of pricing.
  
  
• Imports from the US down 13%: Scrap imports from the US declined by 13% m-o-m, reflecting a continuing downward trend. This decrease can be attributed to competitive pricing from alternative sources.
  
  
• Imports from Russia improve by 225%: Interestingly, scrap imports from Russia experienced a remarkable 225% m-o-m growth, reaching 46,503 t in May. This surge in imports from Russia can be attributed to factors like favourable pricing and availability. South Korea's steel industry is likely to capitalise on these conditions to increase its scrap imports from Russia substantially.