- Southern region sees stronger inventory build-up
- Lower steel production slows scrap consumption
SteelDaily: The cumulative ferrous scrap inventory at eight major South Korean steel mills increased for the fourth straight week, by 39,000 tonnes (t) (4.7%). As of the second week of July, inventories totalled 861,000 t against 822,000 t in the previous week.
Scrap inventories have steadily accumulated for a month now, given that mills are buying more material than they are consuming.
Region-wise inventory
This week, the overall increase in national steel scrap inventory was fuelled by a significant build-up in the south, compared to the central region.
Central region: Inventory levels increased by approximately 4.2% w-o-w to 527,000 t from 505,000 t.
Southern region: A sharper increase of 15% was seen, with volumes rising to nearly 334,000 t versus 292,000 t last week. Notably, larger steel mills drove much of the inventory build-up in the south.
Market update
According to a market participant, “As consumption slows amid reduced steel production, scrap inventories are naturally rising. Additionally, some companies appear to be building up short-term inventories in advance, taking proactive steps to secure material before scheduled maintenance shutdowns.”
A market participant noted, “The industry views this trend as a normal part of the seasonal supply-demand cycle during summer. With deeper production cuts expected ahead, inventory levels are likely to be adjusted accordingly, and the current pace of accumulation is expected to gradually slow down.”
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
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