South Korea's scrap inventory rises by 6% w-o-w

• South Korea's scrap inventory is on the rise after declining for 7 weeks.
  
  
• Inventory growth is particularly evident in the southern region.
  
  
• Steelmakers in the central region are expected to start cutting production in earnest.
  
  

After declining for 7 weeks, South Korea's scrap inventory has finally returned to an upward trend. This week, the total inventory of the eight steelmakers was 833,000 tonnes (t), up 6.5% from the previous week.

The increase in inventory is due to a combination of factors, including a slight decrease in production, steelmakers' continued warehousing, and decreased demand from steelmakers due to production cuts during the summer.

Southern region

In the southern region, inventory growth is particularly evident. The total inventory of steelmakers in the southern region is 382,000 t, up 16.1% from the previous week. POSCO's inventory increased significantly by 30% compared to the previous week, likely due to imported scrap that arrived at the beginning of the month and was recently unloaded.

Rebar steelmakers in the Busan-Gyeongnam region all saw a 10% increase in inventory compared to the previous week. Production cuts in June appear to have had a significant impact.

Central region

On the other hand, the inventory of steelmakers in the central region remained at a similar level to that of the previous week.

If demand remains modest and inventory levels also remain modest, it is highly likely that inventory will increase next week as well. Moreover, the imports of steelmakers are finishing unloading one after another.

As demand decreases, inventory increases and builds up. From now on, steelmakers in the central region are also expected to start cutting production in earnest.

An official from Dongkuk Steel said, "Since product demand is very low, we will have no choice but to adjust our scrap holdings by looking at the product inventory."

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