South Korea's rebar inventory rises on slow buying due to early price cut announcements for Aug'22

South Korean mills are reportedly holding 355,000 tonnes (t) of rebar inventories as on 1 August 2022. In comparison with mid-July, inventories are higher by 40,000 t. Compared to the year ago period, rebar inventories are more than double against 180,000 t.

The increase in inventories is due to slow buying interest as the news of sharp price cuts in August was announced early. During mid-July, the outline of a price cut of more than KRW 150,000 ($115) was drawn in the market because of which only urgent basis buying was happening as a result of which inventories got piled up.

Sales volume by seven major rebar producers stood at 691,000 t in July, lower by 76,000 t than the original set target of 767,000 t.

Outlook

Industry insiders are positive on the outlook and are anticipating demand to partially restore from August which was delayed due to price cuts.

"Its not because of lack in demand, its just a pushback," an industry official said. Moreover, construction sites that have delayed their procurement due to fluctuations in prices cannot delay their projects for longer period, thus, there is a high possibility for demand to improve in August, he further added.

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