South Korea's ferrous scrap import volumes amounted to 4.39 million mt in 2020, performing 32.4% lower year on year and the lowest annual volume in more than 25 years, according to Korean customs data.
Japan remained the top supplier to the country, at 2.95 million mt, but down 26.6% from 2019. Volumes from Russia totaled 0.62 million mt, down 12.3% on year, while volumes from the US came in at 0.50 mt, down 55.2%.
Import requirements were already seeing lower figures starting in January, as the country's steel production began declining in January 2019, according to data from the Korea Iron and Steel Association.
Additionally, the COVID-19 pandemic worsened the situation and weighed heavily on South Korea's steel industry, hurting both domestic and export downstream demand, particularly in segments such as auto manufacturing and construction.
Surging prices in the seaborne scrap market since the second quarter, after the first global wave of the pandemic, similarly provided little recourse. Global scrap prices began to hit multi-year highs towards year-end, as a recovery in scrap generation lagged that for steel production.
This pitted steelmakers against their respective slower-to-recover domestic steel markets, and eventually bit into melt margins and appetite for the raw material.
In December, however, import volumes saw a glimpse of improvement, rising 24% month on month to 383,895 mt. This figure was still 26.0% below the year-earlier level though.
Scarp import volumes in 2020 were also the lowest in 25 years and a far cry from the peak of 10.13 million seen in 2012.
Source : Platts
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