South Korea: Ferrous scrap inventory continues to drop w-o-w

South Korea, a major ferrous scrap importing country, saw a noticeable drop in inventory w-o-w. As the market bottoms out amid low demand and steelmakers continue to lower purchase prices, suppliers are restricting supplies, as per a SteelDaily report.

Scrap providers in the Gyeongju-Pohang region have more warehousing challenges since the cargo union strike is affecting them more than scrap suppliers in other regions.
Due to a clear bottom and a drop in year-end sales, companies in the central Dangjin and Incheon regions are also not actively storing materials at warehouses.

Most steelmakers see a decline in inventory

Eight steelmakers' scrap inventory this week totalled 956,000 tonnes (t), a decrease of 43,000 t or 4.3% from the previous week.

Stocks with these steelmakers have fallen by 8.6% y-o-y.

• Hyundai Steel: Hyundai Steel, in particular, had the greatest decline of 5.5% in inventory from the previous week.
  
  
• Dongkuk and Hwan Steel: Both Dongkuk Steel's and Hwan Steel's inventory fell by 3.2% and 3.8%, respectively.
  
  
• Daehan and YK Steel: The fall in inventory of Daehan Steel and YK Steel was more than 10%.
  
  

Region-wise inventory status

• Steel mills in the Busan-Gyeongnam region had a sharper decline in inventory, but because their yard areas were less than those of steel mills in the central region, the difference was not evident numerically.
  
  
• The central region's steelmakers had 566,000 t of inventory, a decrease of 36,000 t from the previous week.
  
  
• Steelmakers in the southern region had 390,000 t, which is 7,000 t less than the previous week.
  
  

Market outlook

Steelmakers are more interested in importing scrap as domestic output declines.
As inventory started to decline, suppliers are generally predicting that prices have bottomed out and will rebound by mid-December.

Due to competitive bidding from domestic steelmakers, the export bidding of the Kwandong Cheolwon Cooperative, planned for 9 December 2022, is anticipated to generate a relatively high price.

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