South Korea: Scrap imports rise 9% y-o-y in CY'21 on demand recovery

South Korea's ferrous scrap import volumes in CY'21 (Jan-Dec'21) were recorded at 4.46 million tonnes (mn t), up by 9% y-o-y against 4.11 mn t in CY'20 (Jan-Dec'20), as per data maintained with SteelMint.

The rise in imports was largely due to healthy steel demand, signalling a recovery from the pandemic period.

It marks a noteworthy improvement for South Korea compared with 2020, when several mills were forced to close furnaces and cut scrap purchasing amidst weak downstream sales.

Highlights -

• Imports from Japan rebound: South Korea imported 2.96 mn t of Japanese scrap in Jan-Dec'21, bouncing-back by 5% as against 2.83 mn t in Jan-Dec'20.
  
  

Korean blast furnace (BF) mills remained active in importing higher and premium grades of Japanese scrap such as heavy scrap (HS), Shindachi bara and busheling material owing to a sudden rise in its demand. Stronger demand for construction products in the country during mid-year due to the push-up of several building projects led to higher demand for steel and scrap.

• Imports from US surge over 50% y-o-y: South Korea's scrap import volumes from the US saw a notable hike of 52% to 0.70 mn t in Jan-Dec'21 as against 0.46 mn t in Jan-Dec'20. South Korean mills preferred US-origin material due to lower offers.
  
  

• Active Russian buying: Scrap imports into South Korea from Russia were recorded at 0.58 mn t in Jan-Dec'21. Demand for Russian scrap (A3) remained high among the Korean mills. Also, prices were lower and in accordance with demand of steelmakers.
  
  
• Prices show uptrend y-o-y: SteelMint's yearly average assessment of Japanese H2 prices stood at JPY 46,427/t ($405/t) FOB Japan in Jan-Dec'21 versus JPY 26,720/t ($233/t) FOB Japan in Jan-Dec'20.
  
  

Outlook
Scrap demand of South Korean steel mills is expected to increase to 30% to around 7 million tonnes (mn t) in the years to come, as per a SteelDaily report. South Korean steel giants, POSCO and Hyundai Steel, have already scaled up efforts to reduce hot metal production in blast furnaces in a bid to go carbon-neutral by 2050.