South Korea: Ferrous scrap inventory rises on factory downtime and special purchases

• Scrap inventory rises on supply disruptions
• Steelmakers’ operation curtailments signal tightening

SteelDaily: The combined ferrous scrap inventory of eight major South Korean steel mills increased by nearly 100,000 tonnes (t) to 727,000 t this week from 631,000 t in the previous one.

Domestic steelmakers’ scrap inventory has surged due to increased factory downtime and special purchase recalls.

Accordingly, inventories in both the central and southern regions edged up w-o-w. However, of the two, the central region registered a higher uptick.

Region-wise inventory

Central region: The central region’s steel scrap inventory increased by approximately 16% w-o-w to 331,000 t.

Hyundai Steel’s Incheon plant recorded a 6% increase in inventory, while Dongkuk Steel’s inventory remained unchanged. Hwanyoung Steel saw a nearly 9% gain, and Hyundai Steel’s Dangjin plant reported a 40% gain.

Southern region: The southern region’s steel scrap inventory increased by approximately 14% w-o-w to 396,000 t.

POSCO and Korea Iron and Steel maintained stable inventory w-o-w, whereas Korea Special Steel recorded a notable 17% increase. Additionally, the combined inventory of Daehan Steel and YK Steel decreased by 10%, likely due to Daehan Steel’s production outpacing its stock levels.

Market update

Hyundai Steel’s Pohang plant has reportedly played a major role in the overall inventory increase, as recent operational disruptions have led to unstable production.

The special purchase recovery, which began at the Korean Special Lecture, is expected to spread to the metropolitan area from the Yeongnam region in April, leaving large companies’ yards emptier.

According to a market participant, “Most yards have already been emptied and the market appears to have been stretched to its limit. However, signs of tightening supply are gradually emerging as major steelmakers scale back plant operations one after another.”

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