- Supply concerns arise as inventory falls 11%
- Scrap tags may rise if stock shortage persists
SteelDaily: The combined ferrous scrap inventory of eight major South Korean steel mills fell by nearly 11% w-o-w to 619,000 t, marking the sixth consecutive week of decline.
Ferrous scrap inventories at domestic steelmakers are declining rapidly, sparking concerns over supply and demand instability.
The central region saw a sharper decline of 18% w-o-w, while the decrease in the southern region was less significant, at 3.4%.
Region-wise inventory
Central region: In the central region, scrap inventory decreased by 18% w-o-w to 302,000 t.
Hyundai Steel’s Incheon and Dangjin plants each saw an 8% decline in inventory. Meanwhile, Dongkuk Steel’s inventory dropped by 20%, while Hwanyang Steel’s levels increased by 5% w-o-w.
Southern region: In the southern region, inventory levels declined by 3.4% w-o-w to 317,000 t. Contrary to expectations, the downtrend continued even after the Lunar New Year holiday.
Hyundai Steel’s Pohang plant saw a 9% w-o-w decline, while POSCO’s inventory dropped 7%. In contrast, Korea Iron and Steel’s total inventory surged by 25% w-o-w.
Meanwhile, the combined inventory of Daehan Steel and YK Steel increased by 2% w-o-w.
Market update
Although no scrap iron was received during the Lunar New Year holiday, Hyundai Steel’s blast furnace operation continued. This seems to have been due to maintenance at the Pohang plant.
A market participant stated, “The current daily stock of 2,000 t of scrap is inadequate. Some companies are making unofficial contract purchases to secure inventory, and there is a risk that market fundamentals could worsen further in the future.”
Another source stated, “Some companies are considering adjusting production, while others are aiming to maintain operations to meet demand. If the inventory shortage persists, scrap price increases seem inevitable.”
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