South Korea: Ferrous scrap inventory at major steel mills drops by 3% w-o-w after consecutive rise

• Ferrous scrap inventory declines amid price cuts and warehouse controls
  
  

The combined steel scrap inventory held by the top eight South Korean steel producers stood at 868,000 tonnes (t) experienced a decrease of 3% w-o-w, marking the first decline in a considerable duration. The catalyst for this trend appears to be the widespread price reductions that have reached the southern region, coupled with stringent warehouse controls centred around metropolitan areas.

Central region

In the central region, the total inventory stood at 489,000 tonnes(t), reflecting a 1.8% decrease from the previous week. Notable changes were observed at Hyundai Steel's Incheon and Dangjin facilities, which maintained their inventory levels from the previous week. Meanwhile, Hwangwan Steel and Dongkuk Steel recorded reductions of 2% and 6.3%, respectively.

Southern region

The southern region's total inventory is estimated at 379,000 t, indicating a more significant decline of 5.4% compared to the previous week. Hyundai Steel's Dangjin plant maintained its inventory, while POSCO, Korea Steel, Daehan Steel, and YK Steel reported reductions ranging from 6.1% to 8.1%.

Industry outlook

Industry experts suggest that the current trend reflects a lag in demand for ferrous scrap and an imbalance in inventory levels compared to previous years. Despite substantial product inventory, numerous factories are experiencing downtime, contributing to the observed decline.

Implications for supply, demand

The proactive measures taken in sectors such as section steel and rebar, involving significant production schedule reductions of over 30%, are anticipated to impact the supply and demand dynamics of ferrous scrap significantly. These adjustments are poised to shape the industry landscape in the coming months.

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