South Korea: Scrap inventory at major mills drop 1% w-o-w

Combined steel scrap inventory of eight South Korean steel firms totals 979,000 tonnes (t), down 12,000 t or 1.21% from the previous week due to limited mill production. Inventory details by region:

Central region: Inventory stable at 525,000 t. Modest fluctuations in Dongkuk Steel and Hwangwan Steel, but overall consistent. Hyundai Steel in Incheon and Dangjin maintains the same levels, resulting in no change in the central region's total inventory.

Southern region: Inventory decreases by 12,000 t or 2.5% to a combined total of 454,000 t. Daehan Steel and YK Steel see a collective decrease of approximately 2.2%, while Korea Steel and POSCO each witness a reduction of around 4%. Despite consecutive two-week declines, the inventory is 12.3% higher than the same week in the previous year.

Market sentiment suggests a potential bottoming out of prices, evident in the decline in the daily stock levels of rebar steel manufacturers in the Busan-Gyeongnam region. The average daily warehousing for the four rebar steel companies decreases to 8,160 t, down around 4,000 t compared to the peak warehousing in the third week of November.

Reduced production influenced by seasonal factors contributes to the decline in inventory. Some companies adjust their supply, believing prices have hit rock bottom. A supplier notes the decrease in production may challenge meeting limited inventory, and the substantial gap with import prices and diminished distribution volume could keep prices from rebounding by year-end and possibly into the beginning of the next year.

Nevertheless, the steelmaker emphasized that despite no plans for an increase in scrap demand beyond current consumption by year-end, they are maintaining inventory at its current reduced level. An official from a steel manufacturing company stated, "Despite our ongoing efforts to control inventory, it is not decreasing significantly, making it challenging for prices to rebound by the end of the year and possibly extending into the beginning of the next year."

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