South Korea: Shredded scrap generation impacted by lower auto production

South Korea, the leading scrap consuming country, has been seeing a decline in shredded scrap volumes since mid-2021. The present situation is getting worse for shredded scrap companies as the total car scrap has seen a consistent sharp fall after peaking at about 105,000 t in Apr’21. The volume dropped to 59,000 t in Sept’21 while in Jan’22, it is recorded at 51,000 t, as per SteelDaily reports.

The main reason behind the decline in shredded scrap generation was the shortage of semiconductors which led to lower automobile production. The fall in shredded base material from cars also pushed up its prices.

Notably, South Korea’s scrap usage in steelmaking stood at around 25.8 mnt in CY’20 according to the Bureau of International Recycling, of which imports were at 4.11 mnt.

The chip shortage problem also impacted auto production in Japan. Toyota’s production is expected to fall short by 0.5 million units to 8.5 mn units from the previous forecast of 9 mn units for the fiscal year ending Mar’22.