South Korea: Ferrous scrap inventory drops by 3% at major mills for 3rd consecutive week

SteelDaily: This week, the combined ferrous scrap inventory of eight major South Korean steel mills reached at 668,000 tonnes (t), marking a decline of 3% w-o-w from the previous week's 687,000 t. Notably both regions saw a drop, but the decline in the southern region is greater than in the central region.

Region-wise inventory

Central region: In the central region, steelmakers' scrap inventory levels dropped marginally by 0.8%, reaching 346,000 t as compared to the previous week. In terms of companies, Hyundai Steel's Incheon and Dangjin plants remained unchanged from last week. In contrast, Dongkuk Steel saw a 6.6% decrease due to major maintenance at its Incheon plant, while Hwanyoung Steel Industry experienced a 6.4% increase.

Southern region: In the southern region, inventory levels were assessed at 322,000 t, reflecting a 5.2% decrease from the previous week. This decline was largely due to major maintenance activities at key companies, particularly Daehan Steel, which began its maintenance during the mid-month, resulting in significant reduction in inventory levels. Additionally, inventories of other key producers such as - YK Steel, has also decreased. Hyundai Steel's Pohang Plant reported no change in inventory levels, while POSCO's scrap inventory fell by 2.2% from the previous week.

The combined inventory of Daehan Steel and YK Steel fell by 16.1% and Korea Iron and Steel also decreased by more than 12.9% compared to the previous week.

Currently the supply and demand scenario is imbalanced resulting from the continual drop in inventory levels. However, scrap consumption is likely to decrease owing to maintenance work and the upcoming Chuseok holidays from late August to mid-September. Moving forward, monitoring freight volume trends will be crucial for understanding future market dynamics.

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