South Korea: Ferrous scrap inventories rise for the second week

South Korean steel mills started to lower domestic scrap purchase prices, resulting in an improvement in scrap inventories. The scrap holdings of the eight prominent steelmakers totalled 793,000 t, an increase of 62,000 t or 8.5% from the preceding week.

Hyundai Steel cut its scrap buy prices by KRW 15,000/t ($12/t) from 17 January, as per SteelDaily reports. Hyundai Steel will lower all-grade scrap prices for its Dangjin Steel mill and Incheon plant.

Further, some steelmakers seem to be adjusting their stocking volume. Daehan Steel's warehouse will be closed from 21 to 24 January, in observance of the Lunar New Year holiday. POSCO has also been implementing a warehousing quota system since last week.

Region wise inventory status-

• Central region: Hwan Steel accumulated more than 60% of its inventory compared to the previous week, showing the steepest inventory increase among steelmakers. Dongkuk Steel showed a 6.25% increase in inventory compared to the previous week.
  
  
• Busan-Gyeongnam region: The increase was also evident among steelmakers in the Busan-Gyeongnam region. The combined inventory of the three rebar manufacturers in the Busan-Gyeongnam region increased by 21% from the previous week.
  
  

Daehan Steel, YK Steel, and Korea Iron & Steel all showed 20%-level inventory growth. The inventories of steelmakers in the central region totalled 454,000 t, up 45,000 t or 11% from the previous week.

Hyundai Steel stockpiled a significant amount of inventory in both Incheon and Dangjin.

• Southern region: The scrap holdings of steelmakers in the southern region totalled 339,000 t, up 17,000 t from the previous week. POSCO's scrap inventory decreased slightly. However, steel bar makers' scrap inventories in Busan and South Gyeongsang province increased significantly.
  
  

Outlook: Steelmakers' inventories seem to have reached an 'appropriate level' with stock rising sharply for two weeks in a row. Due to scheduled repair works in January and the Lunar New Year holiday, there is not much demand for scrap. So, it is widely believed that there will be no shortage even at the current level of inventory.

Note: This article has been published in accordance with an article exchange agreement between SteelDaily and SteelMint.