South Korea: Ferrous scrap inventory increases for 2 weeks straight

• Mills stockpile ahead of expected July maintenance
• Central region drives rise in national scrap inventories

SteelDaily: The cumulative ferrous scrap inventory of eight major South Korean steel mills rose for the second consecutive week, following a prolonged period of continued decline. Inventories climbed up by around 8% to 793,000 tonnes (t) from 729,000 t the previous week.

This sustained increase was driven by stock replenishment efforts and seasonal supply-demand shifts typical of the summer period, particularly with a notable rebound seen in the central region.

Region-wise inventory

The overall rise in national steel scrap inventory appears to have been primarily driven by a sharp uptrend in the central region.

Central region: The central region’s steel scrap inventory increased by approximately 15.3% w-o-w to 476,000 t from 413,000 t.

The increase appears to be driven by a recovery in import volumes across the metropolitan area, with daily average arrivals now outpacing consumption.

Southern region: The southern region’s scrap inventory held steady at around 317,000 t versus 310,000 t last week.

Market update

According to a market participant, some companies are stockpiling scrap in advance, expecting tighter supply in July. This is viewed as a strategic move to manage expected summer supply-demand challenges, rather than a sign of immediate demand growth.

In fact, several major South Korean steelmakers are set to conduct production cuts and maintenance in July. Dongkuk Steel’s Incheon plant will be shut from 22 July to 14 August, while Daehan Steel plans a 10-day maintenance from the second week of July.

Additionally, steel scrap usage is expected to decline as summer maintenance begins at Korea Iron and Steel and Hwanyoung Steel, along with a possible shutdown at Hyundai Steel’s Incheon plant. These factors will likely reduce overall scrap consumption in the coming weeks and keep inventories high.

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