South Korea: Ferrous scrap inventory at major mills drops 2% w-o-w

This week, the combined ferrous scrap inventory of eight major South Korean steel mills reached 768,000 tonnes (t), a 2% decrease from the previous week's 799,000 t. The inventory reduction was more pronounced in the central region compared to the south, where news of the price cut had been announced.

Region-wise inventory

Central region: In the central region, scrap inventory was recorded at 389,000 t, a decrease of 2.7% from the previous week. While inventories at Hyundai's Incheon plant and Dongkuk Steel remained unchanged, Hyundai Steel's Dangjin plant saw a decrease of 7.1%, and Hwan Steel's inventory dropped by 3.1%.

Southern region: In the southern region, the decrease in inventory was less significant compared to the central region, as the quantity of goods received increased following the price cut announcement. POSCO, rather than rebar manufacturers, led the decline in inventory.

Specifically, the combined inventory of Daehan Steel and YK Steel rose by 1.8% compared to the previous week, while Hyundai Steel's Pohang Plant maintained the same inventory level as the previous week. Korea Steel's inventory decreased by 2.7%, and POSCO's inventory fell by 2.1%. Additionally, the inventory for Korean Special Lectures increased by more than 15%.

Meanwhile, for rebar, the primary product, inventory levels are estimated to remain in the high 300,000 t range. As Korea enters the off-season without a decrease in product inventory, it is evident that the demand for ferrous scrap is not as high as in previous years.

However, industry officials note that the generation of ferrous scrap is also decreasing in line with demand. Currently, supply and demand are at a low point, relying solely on domestic scrap. There is concern in the market that the distribution of scrap could be significantly reduced.

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