South Korea: Ferrous scrap inventory dips for first time since early Oct'24

SteelDaily: This week, the combined ferrous scrap inventory of eight major South Korean steel mills, which had been rising since early October 2024, decreased by 6.3% to 754,000 tonnes (t) from 805,000 t in the previous week. The fall comes in the wake of inventory adjustments and production curbs undertaken by manufacturers.

Both the southern and central regions saw a declining trend, but the former experienced a more significant decrease than the latter.

Region-wise inventory

Central region: In the central region, scrap inventory fell by 3.5% w-o-w to 436,000 t.

In terms of companies, Hyundai Steel's Incheon plant experienced a 7.6% decrease in inventory levels compared to the previous week, while the Dangjin plant kept its inventory stable w-o-w. Meanwhile, stocks at Dongkuk Steel and Hwanyoung Steel declined by 3.8% and 2.5% w-o-w, respectively.

Southern region: In the southern region, inventory levels were assessed at 318,000 t, down by 9.9% w-o-w. Hyundai Steel's Pohang plant witnessed an 18.1% w-o-w dip in inventory levels, while POSCO's scrap inventory dropped by 4% w-o-w.

The combined inventories of Daehan Steel and YK Steel fell by 9.5% w-o-w. On the other hand, Korea Iron and Steel's inventory dropped by 10.3% from the previous week.

Additionally, Korea Special Steel recorded a modest increase of approximately 5.7% w-o-w.

The steel industry is currently focused on reducing inventory rather than increasing it. After nationwide price cuts, stockpiles have started to decline, mirroring a drop in demand for scrap steel, especially in metropolitan areas. With production cuts becoming more pronounced, manufacturers are adjusting their strategies to prioritise efficiency and respond to evolving market dynamics, leading to a careful re-evaluation of inventory management.

Another market participant said,"The supply and demand balance remains recession-like, with low inventory and usage. Although inventory has decreased, actual usage has also dropped, so a tight market is not expected."

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