During this week, the scrap inventory of leading South Korean steel producers rose by 2%, amounting to 11,000 tonnes (t), reaching a total of 736,000 t compared to the previous week. When comparing the southern and central regions, the southern region witnessed a rise, while the central region saw a slight decline. Instead of characterizing it as a reduction in inventory, it seems that the persistent accumulation of inventory, particularly centered around Hyundai Steel, continues to influence the overall situation.
Region-wise inventory
Central Region: In the central region, both Hyundai Steel’s Incheon and Dangjin facilities kept their inventory unchanged from the previous week, while Dongkuk Steel witnessed a 2.8% decrease. Interestingly, Hwan Steel was the sole company in the central region to note an increase, with inventory registering a rise of 6.6%.
Southern Region: In the southern region, the total inventory reached 389,000 tonnes, indicating a 3.18% increase from the previous week. POSCO witnessed a 1.88% uptick in its inventory, while the combined inventories of Daehan Steel and YK Steel surged by approximately 7.2% compared to the preceding week. Despite a relatively smaller denominator, Korea Steel marked a notable inventory escalation of over 17% from the previous week. Additionally, Korea Special Steel demonstrated a substantial 28% increase, contributing to an overall rise in the inventories of all companies in the region.
The increase in inventory levels in the southern region is linked to SeAH Changwon Special Steel discontinuing its special purchases of raw iron and heavy goods, effective from 27 January. This move resulted in an actualized price reduction of KRW 10,000/t, contrary to market expectations of further increases. While other steel manufacturers did not adopt this cost-cutting measure, it proved effective in enhancing overall inventory levels.
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