South Korea: Scrap inventory at major mills rises by 4% w-o-w

This week, the iron scrap inventory for the eight South Korean steel companies was estimated to be around 725,000 tonnes (t), reflecting a 4% increase or 28,000 t compared to the previous week. This uptick was attributed to the inventory stabilising, and notable recovery was observed in Hyundai Steel, which had previously reduced its iron scrap inventory significantly due to product inventory buildup.

Notably, it marked the initiation of an upward trend after approximately 8 weeks.

In terms of regional breakdown, both the central and southern regions experienced an increase, with the central region witnessing a relatively high surge in steelmaking inventory. Steelmakers in the central region reported an inventory of 348,000 t, marking a 5.14% increase compared to the previous week. Conversely, steelmakers in the southern region saw their inventory rose by about 3%, reaching 377,000 t compared to the preceding week.

Despite the overall increase in inventory, it remained challenging to assert that it is sufficient when compared to the levels of the previous year. Considering that the inventory during the same period last year was approximately 800,000 t, the current inventory is about 9.4% lower. Notably, when focusing on only the three companies in the Busan and Gyeongnam regions, the decline rate compared to the same period last year reaches 25%.

As for future trends in iron scrap inventory, a definitive answer is elusive. However, it is believed that the significantly reduced demand for products will exert a direct impact on iron scrap inventory levels.

In the case of rebar, sales approached a level close to the sales target rate by mid-month. However, given the substantial decline in sales momentum after mid-month, achieving the sales target in January appears challenging. Compounding the situation, H-beams are driving market demand, and instances of delays at large construction sites are being frequently reported.

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