South Korea: Scrap imports slide 5% m-o-m in Nov’21 on lower bookings from Japan

South Korea’s ferrous scrap import volumes in Nov’21 were at 0.36 million tonnes (mn t), down by 5% m-o-m against 0.38 mn t in Oct’21, as per data maintained with SteelMint.

The imports began slipping, mostly due to sluggish winter construction demand. Also, preference for domestic scrap over imported kept import bookings low.

Japan continued to be the largest supplier to South Korea at 0.22 mn t. Other major exporters were Russia and USA at 0.06 mn t and 0.04 mn t respectively.

On a y-o-y basis, South Korea’s ferrous scrap imports increased almost 30% from 0.28 mn t in Nov’20 signalling a recovery in the post-pandemic scenario.

In Jan-Nov’21, Korean mills imported a total of 4.04 mn t of scrap, up 8% as against 3.75 mn t seen in the same period last year.

Market highlights

• Imports from Japan drop: South Korea imported 0.22 mn t of Japanese bulk scrap in Nov’21, a marginal decrease of 4% as against 0.23 mn t in the previous month. Notably, this is the third straight month, i.e. after Sept’21, in which Japanese suppliers were inactive in selling to Korean mills as most found it more profitable to cater to the high demand in the domestic market.

Moreover, the Korean mills were avoiding inking contracts with Japanese scrap suppliers due to high export prices amid strong domestic demand.

SteelMint’s monthly average assessment of Japanese H2 prices stood at $471/t  FOB Japan in Oct’21 versus $407/t FOB Japan in Sept’21. On the other hand, bid prices of H2 at Tokyo Steel’s Utsunomiya works stood at $472/t DAP  in Oct’21.

• Imports from USA fall 20% m-o-m: South Korea’s scrap import volumes from USA saw a decline of 20% to 0.04 mn t in Nov’21 as against 0.05 mn t in the previous month. South Korean mills preferred different origin scrap over US-origin material owing to a steep hike in freight charges which made buyers step back from concluding deals with US traders.
• Imports from Russia fall: Russian scrap imports into South Korea saw a decrease of 25% to 0.06 mn t in Nov’21 as compared to an almost two-fold increase to 0.08 mn t in Oct’21 against 0.03 mn t in Sept’21.Imports from Russia in November witnessed a downtrend due to a wide bid-offer gap.

Outlook
The Korean mills are likely to be active after the winter season with demand increasing for construction activities.