- Scrap inventories decline again as supply stays tight
- Southern mills face production cuts, turn to flexible buying
SteelDaily: The combined ferrous scrap inventory of eight major South Korean steel mills fell by approximately 4% to 742,000 tonnes (t) this week from 764,260 t last week. This marks the fifth weekly decline in first week of June.
Region-wise inventory
The central region experienced a slight inventory buildup, while the southern region saw a notable decline due to persistent supply shortages relative to production levels.
Central region: The central region’s steel scrap inventory increased by approximately 1.5% w-o-w to 412,000 t.
Southern region: The southern region’s scrap inventory decreased by approximately 8% w-o-w to 330,000 t.
In the southern region, some steelmakers are struggling to meet even half of their daily production capacity due to critically low scrap inventories. Industry sources say, “The production volume itself is insufficient, and expectations of price increases driven by continued exports appear to be influencing market sentiment.”
Meanwhile, the central region is also facing challenges with scrap imports. Some companies reported a temporary uptick in freight volumes, likely due to concentrated shipments from specific accounts. However, this is not yet seen as a sign of recovery.
Market update
According to one market participant, “Yard support is keeping purchase prices reasonable, but inventory levels remain sluggish. It’s important to determine whether this reflects genuine production shortfalls or just market expectations of a price increase.”
Amid the ongoing supply-demand imbalance, some steelmakers are opting for selective buying strategies or shifting to negotiated purchases to maintain flexibility in procurement.
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
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