- Scrap inventories climb up for 2nd straight week
- Sellers boost shipments to meet cash flow needs
SteelDaily: The cumulative ferrous scrap inventory at eight major South Korean steelmakers rose for the second straight week to about 734,000 tonnes (t) in the second week of September, up 1.9% from 720,000 t in the previous week. The slight uptick stemmed from stagnant rebar prices and cash flow constraints.
Region-wise inventory
By region, inventories in the south rose 5.9% w-o-w to 305,000 t from 288,000 t, while inventories at central South Korean mills edged down to 429,000 t.
Market updates
The southern region recorded a notable inventory rise, as purchase price cuts were quickly reflected. In the metropolitan area, the extended special steel scrap zone helped secure stable volumes, while planned imports are expected to drive further short-term growth.
The rise in inventories was driven by stagnant rebar distribution prices, holding near KRW 680,000/t, and the need for cash flow. With rebar prices flat, steelmakers struggled to raise scrap purchase prices, prompting suppliers to release holdings and boost shipments.
This reflects higher shipments to steelmakers, as suppliers moved to secure liquidity ahead of mid-month, increasing deliveries to meet cash flow needs.
According to a market participant noted that “while scrap steel inventories have risen, the absolute level is still insufficient. The market trend may shift after mid-month, depending on shipment patterns ahead of Chuseok.”
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
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