South Korea: Steel mills’ scrap inventory increases w-o-w

Ferrous scrap inventories of major South Korean steelmakers increased by only 33,000 tonne (t) or 4% w-o-w as on 29 March. Volumes totalled 904,000 tonne (t).

Inventories increased with most steelmakers. Especially, southern steelmakers saw an increased inventory such as Daehan Steel, Hyundai Steel’s Pohang Plant, and POSCO.

This is because inventory falls were evident in March when demand peaks in earnest. This year, however, the average inventory in March is 53,000 t, higher than the average inventory in February.

Region-wise inventory status

Central region’s inventory status: Inventories with steelmakers in the central region totalled 567,000 tonne, up 1.3% from the previous week.

Dongkuk Steel, Hyundai Steel’s Dangjin/Incheon plants, and Hwan Steel all showed a slight increase in inventory without showing any significant change from Jeonju. Inventory fluctuations were not large. However, stocks on hand are still high.

The current decline in inventory is slower than previous years. It is clear that inventory is accumulating.

Southern region’s inventory status: In the southern region, Daehan Steel’s inventory growth was most evident.

Daehan Steel’s inventory increased by 20% from the previous week. Posco also saw a significant increase in inventory by more than 10%. Hyundai Steel’s Pohang plant also showed an increase in inventory by about 10%. At Korea Steel and YK Steel there were little inventory change.

Inventories with southern steelmakers increased by 26,000 t to 337,000 t in one week due to surge in inventories of some steelmakers. This showed an increase of 8.4%.

The daily warehousing volume of the Busan-Gyeongnam steelmaking companies which remained at 11,000 t until last week, has exceeded to 14,000 t this week.

As the possibility of a decline spread throughout the market this week, stocking volume is expected to remain high for some time.

The relaxed inventory situation is expected to directly affect prices. An official from a steelmaker said, “There will be no price increase for the time being as stocks piled up considerably.”

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