South Korea: Ferrous scrap import plunges by 47% in Jan’21

South Korea’s imported 0.19 mn t of ferrous scrap in Jan’21, registering a drop of 47% m-o-m, as per data recorded with SteelMint. Preference to domestic scrap amid high imported scrap offers resulted in lower imports.

Steelmakers cut production early in the year amid weak demand in domestic and overseas markets. Mills sourced most of their scrap requirement from the domestic market, reducing seaborne purchases. Also, Hyundai Steel had extended restarting its 70t & 80t steel plants in Incheon resulting in lower scrap consumption.

• Imports from Japan fall – Japan remained the largest scrap supplier with a volume of 0.14 mn t in Jan’21, down by 39% m-o-m. It was followed by Russia and USA at 0.04 mn t and 0.01 mn t respectively in Jan’21. Russia overtook the US as the second-biggest supplier to South Korea as its volumes fell at a slower rate. South Korean mills targeted more Russian scrap because of its quality at a workable price.
• Prices shot up in Dec’20 – Monthly average of SteelMint’s price assessment for Japanese H2 scrap export increased sharply to JPY 39,625/t ($373) FoB in Dec’20 as against JPY 30,125/t ($284) FoB in Nov’20.

Outlook- South Korean mills have increased their bids for Japanese scrap in Feb’21 on global cues. Sources expect prices to increase further in the near term.