South Korea – one of the world’s major ferrous scrap importer witnessed continuous decline in import scrap cargoes in last four months. As per customs data maintained with SteelMint, the country imported 0.28 mn t scrap in Jul ’20, down 13% m-o-m in comparison with 0.33 mn t during Jun ’20.
On a yearly basis, scrap imports sharply fell by 46% y-o-y from 0.53 mn t during the same month in the previous year.
Weak domestic finished steel demand caused Korean mills to reduce production and drop imported scrap procurement at low level. They instead focused on domestic scrap purchase to satisfy their requirement.
Japan’s scrap imports from South Korea dropped 25% in July- On a monthly basis, imports from Japan significantly fell 25% to 0.19 mn t in Jul ’20. Japanese H2 scrap prices increased from JPY 23,000/t FoB levels in May ’20 to JPY 27,500/t levels during the mid of Jun ’20.
Quantity in t
Source: SteelMint stats & customs data
Outlook – Despite tight availability of Japanese scrap, South Korean steel mills have started booking scrap actively. POSCO’s crude steel production guidance has been modified to 35.3 mn t (against 34.1 mn t previously announced) and product sales guidance has been revised to 33.8 mn t compared to previously announced 32.4 mn t, signalling demand recovery which may boost scrap imports.
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