South Korea: Scrap inventories at major mills show slight rise w-o-w despite robust restrictions

This week, the combined inventory of eight South Korean steel manufacturers reached 1,013,000 tonnes (t), marking a slight uptick of 4,000 t or 0.4% compared to the previous week. Most steel companies exhibited variations in inventory, with changes hovering around the 1% range, whether experiencing an increase or decrease.

Steel producers are fine-tuning their inventory levels by implementing robust inventory restrictions. Despite these measures, the impact of subsequent price reductions has led to an uptick in distribution volume, resulting in a status quo for overall inventory - neither decreasing nor increasing.

Region-wise inventory

Central region: The aggregate inventory in the central region amounted to 536,000 t, reflecting a decrease of 0.3% or 2,000 t from the preceding week. In the central region, all steel companies exhibited inventory fluctuations within a 1% range. Specifically, scrap inventory at Hyundai Steel's Incheon plant and Dangjin steel mill remained relatively stable compared to the prior week. Conversely, Dongkuk Steel experienced a 0.7% reduction, and Hwan Steel saw a more pronounced decrease of 1.7%. In light of the overall rise in distribution volume, there is a concerted effort to control warehousing and make necessary adjustments to inventory levels.

Southern region: In the southern region, steelmakers' inventory reached 477,000 t, rising by 1.2% or 6,000 t from the prior week. Most southern steel manufacturers exhibited inventory shifts under 5,000 t or 1%. Korea Steel saw a 5% increase, while Daehan's combined inventory decreased by approximately 1%. Despite varying reduction rates between Busan-Gyeongnam Rebar Steel Company and POSCO, the overall region showed no net change in scrap inventory.

Steel manufacturers are actively curbing inventory growth through robust control measures. Simultaneously, there is a strategic move to offset increased volume through price reductions. November has witnessed five price cuts, and market speculation suggested the possibility of another cut between late November and early December.

An industry source remarked, "Market sentiment suggests we've reached the 'bottom' as market generation has decreased, and prices typically rise at year-start." Expressing concern, he added, "Anticipating further price reductions is essential, not just price hikes."

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