South Korea: Ferrous scrap inventory rises for 2nd consecutive week

SteelDaily: This week, the combined ferrous scrap inventory of eight major South Korean steel mills increased for the second consecutive week, touching 805,000 tonnes (t), up 4.2% from 772,000 t in the previous week. The rise was driven by ongoing price cuts that began late last week and continued into this week.

The central region experienced a more significant increase than the southern region.

Region-wise inventory

Central region: In the central region, scrap inventory increased by 11.8% w-o-w to 452,000 t.

In terms of companies, Hyundai Steel's Incheon plant experienced an 8.3% increase in inventory levels compared to the previous week, while the Dangjin plant experienced a substantial 20% w-o-w surge. Meanwhile, stocks at Dongkuk Steel and Hwanyoung Steel grew by 13% and 8.3% w-o-w, respectively.

Despite these increases, overall supply and demand remain balanced, as Hyundai Steel's Incheon and Dangjin plants are closed for long-term maintenance and are not consuming much scrap.

Southern region: In the southern region, inventory levels were assessed at 353,000 t, down by 4% compared to the last week, following proactive price cuts. Hyundai Steel's Pohang plant witnessed a decrease of 8.3% in inventory levels, while POSCO's scrap inventory dropped by 3.8% w-o-w.

The combined inventories of Daehan Steel and YK Steel rose 5.8% w-o-w. On the other hand, Korea Iron and Steel's inventory dropped by 12% from the previous week.

A market participant explained that "these reductions have dampened enthusiasm for purchases in the downstream market, indicating that buyers may be hesitant to invest at these lower prices. This shift reflects a cautious approach as the market adjusts to the new pricing landscape."

Another market participant said, "As prices keep falling, there is growing fatigue in the downstream market. As production levels were not very high, the drop in inventory after this price cut stands out even more."

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