South Korea: Ferrous scrap inventory with steelmakers down further by 3% w-o-w

South Korean steelmakers' scrap inventory continued to decline for the sixth consecutive week. Major steelmakers had 687,000 tonnes (t) of scrap stocks in the first week of January, down 3% w-o-w from 707,000 t recorded a week ago, as per a SteelDaily report. The decline in inventory continues into the New Year.

Since the third week of November, when awareness of price peaks first spread, the sharp decline in inventory began to somewhat level off.

Region-wise inventory status-

Central region: The stock holdings of steelmakers in the central region totalled 418,000 t, a 4% decline from 436,000 t in the previous week. Hyundai Steel's Incheon plant, Dongkuk Steel, and Hwanyoung Steel all saw their inventory declining. Among steelmakers in the central region, the decline in Hwanyeong Steel is the most marked.

Hwan Steel, which showed the steepest decline last week, also showed the steepest decline this week.

Dongkuk Steel and Hyundai Steel Incheon both showed less than a 10% reduction in inventory.

Busan-Gyeongnam region: The daily inventory of four steelmakers in the Busan-Gyeongnam region, which had been below 10,000 t until last week, rose to 8,300 t on the 2 January, the day of the price hike, and soared to 13,900 t on the day after.

Inventories at reinforcing steelmakers in the Busan-Gyeongnam region, such as Korea Iron & Steel, Daehan Steel, and YK Steel decreased, but inventories at Hyundai Steel's Pohang plant increased resulting in little change in total inventory.

As the perception that prices have peaked has spread in the market since the first week of January, daily stocks are recovering, starting with steelmakers in the Busan-Gyeongnam region.

Southern region: The total inventory of steelmakers in the southern region was 269,000 t, down only 2,000 t from the previous week. POSCO's inventory decreased by 3% from the previous week, continuing a slight decline.

Market participants anticipate that domestic scrap purchase prices have increased rapidly, which is likely to result in increased inventory in the near term.

Outlook: Market conditions are anticipated to change quickly in a week's time. Additionally, sources claim that the quantity of imported scrap scheduled to arrive in February has been partially secured, giving steelmakers some leeway to adjust prices.

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