South Korea: Ferrous scrap inventory rises 4% w-o-w ahead of Lunar New Year holidays

The scrap inventory of eight major steel manufacturers rose by 4% or 33,000 tonnes (t) compared to the previous week, marking the third consecutive weekly increase. Total scrap inventories reached 769,000 t, with the increase attributed to the recent price cuts by steel manufacturers and the approaching Lunar New Year holidays.

In terms of regional inventory changes, steelmakers in the central region experienced a more significant increase compared to those in the southern region.

Region-wise inventory

Central region: Scrap inventory in the central region surged by approximately 11.8%, rising from 347,000 t last week to 388,000 t this week.

Hyundai Steel's Incheon plant saw a 14.2% increase, and the Dangjin plant experienced an 18.1% rise. Meanwhile, Dongkuk Steel's inventory grew by 3.92%, and Hwanghan Steel's surged by 21.88%. The news of Hyundai Steel's price cut is believed to have influenced distribution volume in the central region.

Southern region: In the southern region, inventory decreased by approximately 2% to 381,000 t compared to the previous week's 389,000 t. The situation varied among companies, with some maintaining inventory levels similar to the previous week while others experienced significant decreases.

In the case of POSCO, the combined inventory of Daehan Steel and YK decreased by 5.5% from the previous week and by 3.3% compared to the week before that. Conversely, Korea Steel's inventory saw a notable increase of 22.2%.

After Hyundai Steel's price cut announcement, reports of price reductions by steel manufacturers in the southern region circulated, dampening the likelihood of an uptick in borrower inventory. However, any increase is anticipated to be limited, as the volume of goods is expected to decline significantly starting from the 8 February before the holiday.

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