South Korea: Scrap imports drop over 25% m-o-m in Jan'22 on lower bookings from Japan

South Korea's ferrous scrap import volumes in Jan'22 were at 0.31 million tonnes (mnt), down by 26% m-o-m against 0.42 mnt in Dec'21, as per data maintained with SteelMint.

The imports declined mainly due to sluggish construction demand in the winter season. Also, preference for domestic scrap over imported material kept bookings low.

Japan continued to be the largest supplier to South Korea at 0.20 mnt. Other major exporters were USA and Russia at 0.04 mn t and 0.03 mn t respectively.

However, on a y-o-y basis, South Korea's ferrous scrap imports rose by 63% from 0.19 mnt in Jan'21, showing a recovery in the post-pandemic scenario.

• Imports from Japan drop: South Korea imported 0.20 mnt of Japanese bulk scrap in Jan'22, a decrease of 17% as against 0.24 mnt in the previous month. Notably, this is for the fourth straight month when Japanese suppliers were inactive in the exports market as most found it more profitable to cater to high demand in the domestic market. Earlier in Nov'21, when Japanese scrap prices were on the higher side, South Korean steel mills had changed the way of purchasing ferrous scrap from Japan. The Korean mills started booking scrap at very low volumes and then adopted the wait-and-watch mode on expectation that prices will come down so that they can resume trading in higher volumes.
  
  

South Korea's imports from Japan in August were the highest in CY'21 at 0.37 mnt. However, the same continued to decline in the later months.

Moreover, the Korean mills were avoiding inking contracts with Japanese scrap suppliers due to high export prices amid strong domestic demand.

• Imports from USA drop: South Korea's scrap import volumes from USA saw a sharp decline of 60% to 0.04 mnt in Jan'22 as against 0.10 mnt in the previous month. South Korean mills preferred other origin scrap over US-origin material owing to a steep hike in freight charges which made buyers step back from concluding deals with US traders.
  
  
• Imports from Russia fall: South Korea's scrap imports from Russia saw a decrease of 50% to 0.03 mnt in Jan'22 as compared to 0.06 mnt in Dec'21 due to a wide bid-offer gap.