The slowdown in the South Korean construction industry has put pressure on domestic steel producers, which had to decrease long steel output by 10-15 percent depending on the producer in the July-September period this year. It is unlikely that the situation will improve in the near future, and so the country’s scrap imports will remain at reduced levels.
Hyundai Steel’s long steel production decreased by 15 percent quarter on quarter to 1.958 million mt in the third quarter, while the year-on-year decline was five percent. At the same time, the second largest steel producer in the country Dongkuk Steel cut its rebar and sections output by 10 percent quarter on quarter and by 9.3 percent year on year to 886,000 mt due to the “recession in the construction market,” the company said.
EAF-based crude steel production in South Korea declined by five percent year on year in the first nine months of the current year to 17.12 million mt. As a result, steel scrap consumption fell accordingly and Japanese suppliers, the major exporter to South Korea, had to redirect volumes to other countries, and to Vietnam in particular.
Market sources said that South Korean scrap imports will stay reduced in the first quarter of 2020 as well and that the pricing in the market will depend more on the situation in the Japanese domestic market and demand from developing countries in Southeast Asia.