South Korea: Scrap inventory at major mills rise 4% w-o-w amid relaxation of inventory control measures

This week, the ferrous scrap inventory of eight major South Korean steel mills stood at 832,000 tonnes (t) by the last week of February, marking a notable increase of approximately 4% compared to the previous week's figure of 798,000 t. Steel scrap inventories, which had halted their increase last week, resumed their upward trajectory this week. The resurgence in inventory levels is believed to stem from the relaxation of inventory control measures following the completion of major maintenance activities.

Inventory growth was particularly pronounced in the central region, where the pace of increase outpaced other areas. This disparity in growth rates can be attributed to variations in maintenance schedules, with locations undergoing significant repairs ahead of the peak season experiencing more rapid inventory expansion compared to those with minimal maintenance activities.

Region-wise inventory

Central region: In the central region specifically, steel scrap inventory surged to 432,000 t, marking a substantial increase of 6% compared to the previous week. This increase was notably observed at Hyundai Steel's Incheon plant, which experienced a 5% rise despite undergoing long-term repairs. Similarly, Hyundai Steel's Dangjin plant, indirectly affected by these repairs, saw an 8% increase. Dongkuk Steel and Hwanghan Steel also reported increases of 3.5% and 8.1%, respectively.

Southern region: Conversely, in the southern region, inventory volume reached 400,000 t, indicating a more modest rise of 3% compared to the previous week. Inventory fluctuations varied across companies, with Daehan Steel and YK Steel experiencing a combined decrease of 5%, while Hyundai Steel's Pohang Plant, having completed major repairs, saw an 11% increase, and POSCO recorded a 2% uptick.

Busan and Gyeongnam: The daily intake of iron scrap from steel mills in the Busan and Gyeongnam regions has rebounded to 10,000 t. As the month drew to a close, supplies flowed towards steel companies in the Gyeongnam area, notably Korea Special Steel and Korea Steel, resulting in a daily intake of 10,600 t on the 27 February. This marks the first time in three weeks, that the daily intake of four rebar companies in this region surpassed 10,000 t. Breaking it down by company, Daehan Steel and YK Steel recorded 3,600 t, Korea Steel 3,000 t, and Korea Special Steel 4,000 t. The rapid increase in stock is attributed to news of Korea Special Steel's production reduction and price reduction. On 27 February, Korea Special Steel announced its decision to lower prices by KRWA 10,000/t, effective from Wednesday the 28 February, influencing the surge in stock accumulation.

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