Ailing South Korean Ferrous Scrap Market

South Koran ferrous scrap dealers experience tough time when the dealers file bankruptcy one after another. The dealers with deposit post inventory valuation loss due to continuous price down for 3 months.

South Korea needs annual 10 million tonnes of cold iron source from offshore countries. The import of ferrous scrap increased by 33% to 3.17 million tonnes in January-April from same period of 2011. The volume represents annualized 9.5 million tonnes. With 1 million tonnes of pig iron import, the iron source is oversupply for the country.

South Korean electric furnace steel makers try to make oversupply of cold iron source by importing more than the requirement. The higher import contributes to lower domestic scrap cost. The scheme is happy for South Korean steel makers.

For South Korean steel makers, Japanese scrap market is line South Korean scrap market when they can contact directly with Japanese scrap dealers. Some of South Korean scrap dealers try to import from Japan.

For South Korean scrap dealers, the model is new to process import scrap. Under the combining scrap market of Japanese and South Korean scrap market, Japanese scrap market could be oversupply of scrap.