South Korea: Major steel mills’ scrap inventory declines w-o-w

South Korea’s major steelmakers’ scrap inventory saw a decline w-o-w. Though inventory did reduce a little, the volumes are still high considering low demand in the finished steel market.

Inventory with steelmakers stood at 999,000 tonnes (t) last week, a 1.6% decrease from the previous week.

In Busan and South Gyeongsang provinces, finished and semi-finished steel producers are progressively loosening control over scrap inventory storage due to time limitations. Many steel mills have changed their warehouse open time to limited hours based on standard entrance on the main gate, as per SteelDaily.

Region-wise stockpile-

• Central region: The central region’s steel makers experienced a little shift, adding up to a 0.5% rise w-o-w. Stocks in the region increased by 3,000 t w-o-w compared to 602,000 t in the previous week.
• Southern region: The decrease in inventory was slightly more apparent in the southern region. The southern region’s steelmakers had 397,000 t of scrap inventory last week, a 4.3% decrease w-o-w. Also, inventory dropped by 2% compared to the same week last year.

Major mills’ inventory–

• Hyundai Steel: Scrap inventory fell by 3.6% w-o-w with Pohang works’ stocks declining by 14%. The inventory in its Dangjin and Incheon works changed marginally.
• Dongkuk Steel: Inventory decreased by 3% w-o-w.
• Hwan Steel: Inventory climbed 15% w-o-w.
• Daehan Steel and YK Steel: Inventory fell 7% and 4%, respectively.
• POSCO: The steel major saw a modest but notable decrease in inventory.
• Korea Steel: The 10% rise in Korea Iron and Steel’s inventory had a minor effect on total inventory adjustments since the percentage increase was not very substantial.

Imported scrap prices are likely to fall further

Despite the fall in imported scrap prices, South Korean buyers are still not ready to accept offers from Japanese suppliers. However, this week, scrap prices remained largely stable at JPY 43,000-44,000/t FOB.

Nevertheless, buyers anticipate that prices are yet to bottom out and hence major South Korean steel mills are lowering domestic scrap prices in a jiffy.

• SeAH Steel will cut scrap buy prices by up to KRW 20,000/t ($15/t) from 30 November, as per SteelDaily reports.
• Similarly, SeAH Besteel will cut scrap buy prices for all grades.
• POSCO Steel will lower prices for all grades of scrap for Gwangyang and Pohang works.

Note: This article has been published in accordance with an article exchange agreement between SteelDaily and SteelMint.