South Korea: Ferrous scrap inventory rises 5% w-o-w for first time in 4 weeks

SteelDaily: This week, the combined ferrous scrap inventory of eight major South Korean steel mills reached 692,000 tonnes (t), marking an increase of 5% w-o-w from 668,000 t, observed for the first time in four weeks since late July. This rise was attributed to a partial rebound in special and contract purchases, which particularly benefited steel mills in the southern region.

Region-wise inventory

Central region: In the central region, scrap inventory remained unchanged from last week, holding steady at 346,000 t. In terms of companies, Hyundai Steel's Incheon plant experienced a 17% drop compared to the previous week. In contrast, Dongkuk Steel recorded a substantial 29% w-o-w increase, while Hyundai Steel's Dangjin plant and Hwanyoung Steel remained unchanged.

Southern region: In the southern region, inventory levels were assessed at 346,000 t, reflecting a 7% w-o-w increase from the previous week. Hyundai Steel's Pohang plant reported no change in inventory levels, while POSCO's scrap inventory rose by 8% w-o-w.

The combined inventory of Daehan Steel and YK Steel rose by 23% w-o-w, and Korea Iron and Steel increased its inventory by more than 3.5% from the previous week. Steel imports from the southern region have surged to an estimated 8,400 t, marking their highest increase since early July. This increase is attributed to a significant rise in inventory levels and a surge in special and contract purchases.

However, the outlook for the future market remains uncertain. While the increase in inventory might exert a downward pressure on prices, there are also expectations that ongoing demand could balance this effect. The mixed signals and complexities in market dynamics make it challenging to predict future trends with certainty.

As per market participants, "While large suppliers are cutting inventory, smaller ones are retaining stock, leading to varied market predictions."

The market faces uncertainty with factors such as potential price changes, cheap Chinese steel influx, and seasonal supply and demand shifts.

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