South Korea: Ferrous scrap inventory at major mills rises marginally by 1% w-o-w

SteelDaily: This week, the combined ferrous scrap inventory of eight major South Korean steel mills reached 815,000 tonnes (t), marking a slight 1% increase from the previous week's 807,000 t.

The steel industry's ferrous scrap inventory has been fluctuating weekly since mid-June. This week, the inventory has increased again, but the rate of increase has slowed compared to previous weeks.

Meanwhile, the inventory level was not large by region, but the increase rate in the central region was higher than in the southern region.

Region-wise inventory

Central region: Steel makers' scrap inventory levels increased by 1.1% reaching 437,000 t as compared to last week in the central region. Hyundai Steel's Incheon Plant increased by 7.1% from the previous week. Meanwhile, Dangjin Plant and Dongkuk Steel along with Korea Iron and Steel kept its steel inventories at same level as compared to previous week. On the other hand, Hwanyang Steel's ferrous scrap inventory decreased by 17% as compared to the previous week.

Southern region: In the southern region, scrap inventories were assessed at 378,000 t, registering a marginal 0.8% rise w-o-w. By company, POSCO, which increased its plant usage after renovating its No. 4 blast furnace, recorded a 5.8% decrease compared to last week. Meanwhile, Korea Iron and Steel reported unchanged inventory levels. The combined inventory of Daehan Steel and YK Steel increased by 5%, and Hyundai Steel's Pohang Plant saw an increase of 11.1%.

Meanwhile, reports of special and contract purchases centered around the southern region have sparked growing interest in future stock availability and inventory status. While a few market participants, predicted that supply will tighten due to a rare price increase, others believe the situation will stabilise without significant changes.

An industry insider commented, "In this uncertain market, one thing is clear: we are at a critical juncture where future price movements are difficult to predict. Previously, a downtrend was expected, but now, factors such as low production volume and rising steel prices are causing uncertainty about market trends."

However, based on past cases, an immediate increase seems unlikely. According to SteelDaily, there has not been a single instance since 2010 where the price of scrap steel (average weight A purchase by account company) has risen in the last week of July. The annual summer maintenance and vacation season significantly impacts this trend. If prices are to rise, it is more likely to occur after the last week of July.

An industry insider commented, "The market has been quite fatigued due to over six months of declining prices without significant increases. While the direction remains uncertain, once a decision is made, the market will react considerably."

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