South Korea: Steelmakers' ferrous scrap inventories increase

South Korean steelmakers' scrap inventory inch up toward the month end. It appears that the two sides of supply and demand are being perceived differently.

Scrap inventories of the eight key steelmakers totalled 800,000 t, an increase of 7,000 t from inventory recorded before the Lunar New Year holidays.

SeAh Besteel, Daehan, YK, Korea Steel, and Hyundai Steel raised their scrap buy prices by KRW 10,000/t ($8/t) from 31 January, as per SteelDaily.

Region-wise inventory

Central region: The inventories of steelmakers in the central region are largely the same. This week, the inventories of steelmakers in the central region totaled 451,000 t, down 3,000 t or 0.6% from the previous survey.

Southern region: The increase in inventories among steelmakers in the southern region is evident. This week, the total inventory of steelmakers in the southern region was 349,000 t, an increase of 10,000 t, or 2.95%, compared to the previous year.

Busan-Gyeongnam region: As of 30 January, the amount of scrap warehousing to rebar steelmakers in the Busan-Gyeongnam region is still low.

Company-wise inventory status:

POSCO: POSCO showed a decrease of 8.5% in inventory compared to the previous survey, while Hyundai Steel Pohang showed a 10% increase.

Daehan & YK Steel: The combined inventories of Daehan Steel and YK Steel are at a similar level to the previous survey. Dongkuk Steel and POSCO saw a slight decline in inventory, while most steelmakers increased their inventory.

YK Steel's inventory growth is sharp. This is because it did not consume much scrap due to factory maintenance. It is said that Daehan Steel, whose inventory has decreased, is actively utilising YK Steel's inventory.

Hyundai & Dongkuk: Hyundai Steel's Incheon-Dangjin and Hwan Steel's inventories are the same as in Jeonju, while Dongkuk Steel's inventory decreased somewhat, but only by a small amount.

Compared to the previous year, inventories were about 1.5% less than in the same week of the previous year.

Outlook: Steelmakers' inventories have risen for three weeks in a row. Scrap demand after the CNY holidays is expected to rise and hence the supply-demand ratio might be stable for the next few days. Suppliers are consistent with a passive attitude in supplying goods in anticipation of a slight price increase.

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