- Korean scrap inventory up 5.4% to 767,000 t before price cuts
- Panic selling lifted stocks after unexpected price drops
SteelDaily: The combined ferrous scrap inventory of eight major South Korean steel mills increased by approximately by 5.4% to 767,000 t this week from 727,000 t last week.
Scrap iron inventory has risen for two consecutive weeks, likely due to stockpiling in anticipation of lower purchase prices. Domestic steelmakers have also experienced a continued increase in steel scrap reserves during this period.
Accordingly, inventories in the central region edged up w-o-w but declined slightly in the southern region.
Region-wise inventory
Central region: The central region’s steel scrap inventory increased by approximately 14% w-o-w to 378,000 t.
This surge in inventory with early delivery dates is linked to steelmakers in the central region announcing on 3 April a price reduction for scrap purchases.
Southern region: The southern region’s steel scrap inventory decreased by approximately 1.7% w-o-w to 389,000 t.
The southern region also experienced an influx of deliveries ahead of the purchase price cut on Friday. However, some steelmakers limited stocking due to production cuts, resulting in a decline in inventory.
Market update
Hyundai Steel’s Pohang plant has recently resumed operations, leading to expectations that stalled scrap consumption will pick up again.
According to a market participant, “Small and medium-sized scrap metal companies, anticipating a price increase between February and March, were caught off guard by the recent decline. Some responded with ‘panic selling,’ hastily shipping out large quantities. While this led to a temporary rise in steel industry inventory, it may be a short-term trend, necessitating continuous monitoring.”
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
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