South Korea’s leading steelmaker, Pohang Iron and Steel Company (POSCO), in an effort to minimise the impact on domestic scrap supply and demand, has decided to actively opt for imports of ferrous scrap grades from this year, according to information available from SteelDaily.
The company’s scrap purchase accounted for 3.65 million tonnes (mn t) in 2013 but which declined to 1.3 mn t in 2015, as the mini-mills’ businesses lost momentum. However, last year, due to Covid-19, production fell sharply, leading to even lower consumption of 0.9 mn t. The consumption also varied as per the economic fluctuations and pricing policies.
However, with recovery in steel demand, scrap demand is likely to remain at around 2 mn t this year. It plans to keep the proportion of domestic scrap consumption at 70% and % imported at 30%. However, the purchase ratio might change depending upon POSCO’s steel production. In CY’22, the company plans to maintain its ferrous scrap usage at 2 mn t as well.
An industry official said, “This year, POSCO is likely to use about 0.8 mn t more scrap than usual. The increase in the purchase volume expanded the purchase grade to heavy products. There has also been an increase in the purchases of saengcheol through aggressive price response.”
In the meantime, the company plans to keep its scrap inventory stable at around 0.12 mn t through active imports. In fact, this year, POSCO expanded its procurement to heavy scrap, from saengcheol and light weight, which could make it possible to stabilise supply and demand of the material through imports.
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