- Weak rebar demand leads to rising inventories
- Scrap prices may face pressure amid supply glut
SteelDaily: The combined ferrous scrap inventory of eight major South Korean steel mills rose by approximately 5.9% to 904,000 tonnes (t) this week from 853,000 t last week. This marks the fourth consecutive week with an increase.
Additionally, this is the first time since the third week of December 2023 that inventory has surpassed 900,000 t.
Region-wise inventory
Central region: The central region’s steel scrap inventory increased by approximately 12% w-o-w to 487,000 t.
Southern region: The southern region’s steel scrap inventory remained stable w-o-w at 417,000 t.
Market update
In recent times, steel scrap inventories have climbed up rapidly, particularly in the metropolitan area. This is because of weak rebar demand and reduced operations at certain facilities, with stock levels surpassing consumption. In response, some steelmakers are limiting scrap intake or adjusting inspection schedules, while others are building inventory ahead of the May holidays and limited business hours.
Notably, major steel mills cut scrap purchase prices twice in April.
A market participant stated, “Some steelmakers are opting to store inventory in warehouses rather than letting it flow out. Suppliers are also hesitant to ship inventory while prices remain low, but the ongoing decline is putting significant pressure on them.”
Overall demand continues to show no signs of recovery, and rising inventory levels may pressure prices in the future.
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint.
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