South Korea: Ferrous scrap inventory at major mills drops by 11% w-o-w

SteelDaily: This week, the combined ferrous scrap inventory of eight major South Korean steel mills reached 695,000 tonnes (t), marking a decline of 11% from the previous week's 785,000 t. This marks the first time in roughly seven months, since mid-January, that the inventory has fallen below 700,000 t level.

Notably, the inventory level witnessed a decline of around 10% in both southern and central region as compared to the previous week.

Region-wise inventory

Central region: In the central region, steelmaker's scrap inventory levels dropped by 13%, reaching 364,000 t as compared to 416,000 t in the previous week. In terms of companies, Hyundai Steel's Incheon Plant experienced a 13.3% decrease in inventory due to frequent shutdowns that led to stocking constraints. In contrast, Dangjin plant, with its relatively low production costs, experienced a notable 20% decrease due to increased usage.

Southern region: In the southern region, the ferrous scrap inventory stood at 331,000 t, marking a 10% decrease from the last week. By company, Hyundai Steel Pohang Plant's inventory decreased by 9%, POSCO's scrap inventory dropped by 7% from the last week.

The combined inventory of Daehan Steel and YK Steel have fallen by 17% and Korea Iron and Steel also decreased by 19% compared to the previous week.

The inventory levels have dropped significantly as steelmakers' stocks were depleted due to factory shutdowns and a decrease in production and deliveries, influenced by seasonal factors like the hot summer. As a result, some steelmakers were attempting to secure supplies through special and contract purchases. However, it remained uncertain whether inventory levels will rise from a one-time price adjustment.

An industry insider commented, "With market activity sluggish during the vacation season, it seems unlikely that a small price increase will generate a positive response. It may be necessary to gauge the sentiment of buyers after the vacation season when the market is expected to pick up."

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