South Korea scrap imports surge in February

South Korean ferrous scrap imports in February rose by 69pc on the month, but fell by 2pc on the year, to 369,000t, because domestic scrap supply failed to meet mills' higher demand.

South Korean mills in January said that they will cut domestic scrap collection prices in February. This move led to a rise in supply but it was still insufficient to meet mills' demand. So Mills turned their focus on Japanese scrap when prices began to fall for February arrival shipments.

Japanese H2 export prices fell to ¥34,500/t on 29 January from ¥43,500/t on 8 January. This price decrease encouraged many South Korean mills to purchase high volumes of Japanese scrap throughout the month. South Korean mills were more interested in higher-grade scrap because competition with Chinese steelmakers for HS was high.

Imports from Japan rose by 69pc on the month to 256,000t, but fell by 4pc on the year. Japanese suppliers offered large tonnages to a South Korean mill as the expectation that China will significantly increase imports did not materialise. The increase in supply drove many buyers to withdrew from buying in anticipation of a downward price correction.

Shipments from the US more than quadrupled on the month, but fell by 1pc on the year, to 44,000t in February, because of the arrival of a bulk ferrous scrap cargo that was booked in November-early December 2020, when US export prices began to rise.

Imports from Russia totalled 43,000t in February, up by 11pc from the previous month but down by 8pc year on year. South Korean mills actively sought scrap from Russia's far east and bought a number of cargoes.

Scrap imports from other origins increased by 33pc on the month and 37pc on the year to 26,000t in February.

South Korean scrap imports are likely to remain strong in the coming months as the country encouraged businesses to accelerate the recovery of operations to pre-Covid levels.

Terry Chuay