- Rising stocks suggest recent drawdown may be easing
- Weak steel demand, monsoon may pressure volumes
SteelDaily: The cumulative ferrous scrap inventory of eight major South Korean steel mills rebounded after a continuous five-week downtrend, rising by approximately 2.5% to 729,000 tonnes (t) from 710,775 t last week.
Daily inventory levels have now aligned closely with average consumption, indicating a pause in the recent drawdown and a temporary stabilisation in supply-demand dynamics. The rebound suggests a possible shift in market conditions, though sustainability will depend on production trends, imports, and end-user steel demand.
Region-wise inventory
Both the central and southern regions saw a modest inventory build-up. The south, in particular, witnessed an early recovery after weeks of sharp declines, supported by improving arrivals.
Central region: The central region’s steel scrap inventory increased by approximately 3% w-o-w to 413,000 t from 401,000 t.
Southern region: The southern region’s scrap inventory increased by approximately 2% w-o-w to 316,000 t from 310,000 t.
Market update
According to a market participant, steel scrap inventories appear to be stabilising after several weeks of consistent decline, supported by a rise in incoming volumes. However, the outlook for a sustained rebound remains uncertain and will hinge on multiple factors such as potential steel mill shutdowns, fluctuations in product demand, import volumes, and seasonal weather patterns.
At the same time, concerns persist that steelmakers may scale back scrap purchases due to weak finished steel demand. Early onset of monsoon conditions could also hamper production. Industry participants caution that if supply-demand dynamics worsen during the summer, the current inventory recovery may be short-lived.
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
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