July imports of steel scrap to South Korea increased both on a month-on-month and year-on-year basis following another strong month in June, according to data from the Korea International Trade Association.
Steel scrap imports were 462,729 tonnes in July, up 11.9% month on month from June's 413,567 tonnes and up by 49% year on year from 310,620 tonnes in July 2020.
But a comparatively sluggish start to the year means that over the first seven months of 2021, South Korean scrap imports were still down by 5.5% from the corresponding period in 2002 at 2.57 million tonnes.
The rise in imports in recent months is in line with rising steel production in the country, with South Korea's steel output in June up 17.3% year on year to 6.0 million tonnes, according to the World Steel Association.
Stronger demand for construction products in the country in the May-July period due to the ramp-up of several building projects led to higher steel and scrap prices, a South Korean mill source told Fastmarkets in July, but
demand for scrap has waned in the last few weeks amid a rise in Covid-19 cases in the country.
Fastmarkets'
weekly price assessment for steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr South Korea was $480-490 per tonne cfr on Friday, down $5-10 from $490-495 per tonne one week before.
Korean blast furnace (BF) mills have been particularly active in
importing higher grades of Japanese scrap such as heavy scrap (HS) and Shindachi busheling in recent months, with one major mill in the country telling suppliers that ambitious carbon-neutral targets have raised their scrap intake volumes.
Demand for higher-grade materials from BFs in Korea and Japan has led to a huge premium of ?17,000-18,000 ($155-165) per tonne for Shindachi busheling over H2 scrap in the fob Japan market over recent weeks.
Imports from Japan were 284,192 tonnes in July 2021, down 6.4% month on month from June's 303,750 tonnes, but up 42.0% from 200,180 tonnes in July 2020.
The rise in scrap demand has also seen South Korea looking to the United States in recent months, targeting supplies of steel scrap from the US West Coast.
South Korea imported 79,627 tonnes of US-origin scrap in July, more than double the 38,633 tonnes tonnes imported in June and up sharply from just 11,245 tonnes in July 2020.