Published date: 26 January 2021

South Korea's ferrous scrap imports fell to a 20-year low in 2020 as its steel industry and customers were hit hard by the Covid-19 pandemic.

South Korea's ferrous scrap imports fell to a 20-year low in 2020 as its steel industry and customers were hit hard by the Covid-19 pandemic.

Ferrous scrap imports fell by 32pc to 4.39mn t from 2019, the country's customs data show. This is the lowest level since 4.14mn t in 2000. December ferrous scrap imports increased by 25pc on the month and fell by 26pc on year to 383,985t.

Steelmakers cut production early in the year amid weak steel demand in domestic and overseas markets. Mills sourced most of their scrap requirement from the domestic market, reducing seaborne purchases. South Korean crude steel output fell by 7.2pc to 60.8mn t in January-November, Worldsteel data show.

Japan remained the biggest exporter of ferrous scrap into South Korea, but volumes were only three-quarters those of the previous year at 2.95mn t. Japanese December imports accelerated from November but fell by nearly a third from a year earlier. Mill buyers became more interested in Japanese scrap in the second half of the year when domestic supply became tight but scaled back their purchases as Japanese scrap prices surged.

Russia overtook the US as the second-biggest supplier to South Korea as its volumes fell at a slower rate. South Korean mills targeted more Russian scrap because of its quality at a workable price.

US scrap imports halved to 496,000t in 2020, but ended the year in an uptrend, accelerating by 321pc in December from November.

Scrap from all remaining origins was also cut in half. South Korean mills were more active in the seaborne market late in the year as steel demand picked up and domestic scrap collection was unable to meet requirements. Imported scrap is likely to rise in early 2021 as mills' production picks up.