- Scrap inventories rise for 3rd consecutive week
- Imports, weak demand, price cuts drive build-up
SteelDaily: The cumulative ferrous scrap inventory at eight major South Korean steelmakers rose for the third straight week to about 769,000 tonnes (t), up 4.8% w-o-w from 734,000 t previously.
Inventories increased amid concerns surrounding supply constraints post Chuseok, lower scrap prices, and increased import inflows.
Region-wise inventory
Mills in central South Korea recorded a modest rise in total inventories to 438,000 t, while stocks in the southern region climbed up by 8.5% to 331,000 t from 305,000 t the previous week.
Market updates
Key drivers of the inventory build-up include softer purchase prices and higher import arrivals. Major steelmakers reduced purchase prices across all grades, prompting suppliers and distributors to step up deliveries and boosting stock levels at mills. With additional price cuts planned for next week, inventories are likely to rise further.
With fresh shipments from key suppliers, including Japan, scheduled to arrive, steelmakers are set to face additional inventory pressure in the near term. As of 14 September, Korea had already imported about 70,000 t of general-purpose scrap, surpassing the total August intake of roughly 62,000 t.
However, weaker-than-expected sales of core products such as rebars limited steelmakers’ ability to raise raw material consumption. The ongoing slowdown in the construction sector, along with subdued scrap usage, further added to the buildup in inventories.
A market participant noted, “On top of these factors, some steelmakers appear to be stockpiling in advance to guard against potential supply-demand disruptions after Chuseok.”
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
Leave a Reply