South Korea: Scrap inventory rises 4% w-o-w on bulk cargo arrivals for POSCO

This week, the collective scrap inventory of eight South Korean steel manufacturers reached 852,000 tonnes (t), marking a notable increase of 33,000 t, equivalent to a 4% rise over the previous week. This resurgence in inventory after a three-week period can be attributed to the arrival of large ships for POSCO. While the inventories of most steel manufacturers remained relatively stable or witnessed a slight decrease, POSCO's inventory saw substantial growth.

Region-wise inventory

Central region: In the central region, steelmakers' total scrap inventory stood at 469,000 t, reflecting a decrease of 6,000 t, or a 1.2% drop w-o-w. Dongkuk Steel and Hwan Steel reported a decline of less than 5%, which appeared to be due to deliberate inventory management rather than reduced production volume. For Dongkuk Steel, the absence of imported goods for two consecutive weeks likely contributed to the inventory decline. Hyundai Steel, on the other hand, maintained inventory levels in Incheon and Dangjin that were similar to those in Jeonju.

Southern region: Steelmakers in the southern region witnessed a significant one-week increase in inventory, with the total reaching 383,000 t. This represented a 39,000-t increase or an 11.34% surge compared to the previous week, partly attributable to POSCO's completion of unloading in Pohang.

Busan and Gyeongnam regions: Rebar steel manufacturers in Busan and Gyeongnam maintained inventory levels similar to Jeonju. While the combined inventory of Daehan Steel and YK Steel decreased by 7.8% over the previous week, Korea Steel and Korea Special Steel had nearly identical inventory levels to Jeonju. The collective inventory of the three companies in Busan and Gyeongnam decreased by about 6,000 t compared to the previous week.

It is worth highlighting that South Korean steelmakers are taking proactive measures to adjust their inventory levels in advance, possibly in anticipation of the upcoming "off-season." Notably, SeAH Besteel began implementing inventory control measures for most of their product grades starting on 23 October. While this approach has not yet been adopted by other steel manufacturers, it suggests a prevailing market trend toward an oversupply in distribution volume.

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