Steelmakers' Scrap Buying Activity Declined Substantially

SEATTLE (Scrap Monster): Large steelmakers announced plans to reduce intake of ferrous scrap over the forthcoming months, amid weak market demand for finished steel.

According to market sources, South Korean steel producer Posco has decided to halt purchases of domestic as well as imported scrap for the next two months. Overall steel demand in the country, especially special and high-grade steel demand, has been under pressure in South Korea for some time now. This had led to reduced production by the steelmaker, thereby resulting in reduced scrap intake. Posco has decided to pursue intense cost-cutting measures to overcome the crisis situation.

Incidentally, South Korean crude steel production had totalled 11.16 million tonnes in the opening two months of 2020, down by over 3% when compared with Jan-Feb ‘19, in accordance with most recent statistics published by the Korean Iron and Steel Association (KOSA).

Also, Hyundai steel has announced plans to halt production at its special steel and hot-rolled sheet mills in Dangjin during the second quarter. This is likely to result in reduced scrap imports from primary source countries including Japan, the U.S. and Russia, sources said. Meantime, South Korean scrap imports from Japan have declined by almost one-third year-on-year in the first two months of the current year.

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