South Korean ferrous scrap imports extended further gains and spiked to a three-year high in March, customs data show. Imports rose by 86.7pc year on year to 591,806t in March, marking the highest level since March 2019 at 632,633t. Scrap imports rebounded off a low base from a 10-month low in January, surging by 48.1pc on the month from February. Trade sources attributed the sharp rise in scrap imports to firm domestic demand for steel products. The war between Ukraine and Russia caused supply uncertainty and led to some panic buying in the month, trade sources told Argus. In addition, firm construction activity in South Korea also supported rising steel imports. According to an earlier report by data and analytics provider GlobalData, construction output in northeast Asia is forecast to record 4.2pc growth year on year to $4.71 trillion this year. "Of the construction industries that contracted last year, only South Korea is expected to recover to its pre-pandemic output this year," GlobalData added.
On the economic front, South Korea's industrial production surpassed previous expectations and grew by 1.3pc month on month from February, data from Statistic Korea on 29 April show. Year on year, industrial production rose by 3.7pc from March 2021. Japan remained the top exporter of ferrous scrap to South Korea at 343,620t in March, up by 43.2pc year on year and by 13.5pc month on month. Japan accounted for 58.06pc of South Korea's scrap imports in March. Sources said South Korean buyers did not mind paying a premium to secure cargoes in early March amid robust domestic demand in Japan. The US was the second-largest exporter of scrap to South Korea in March, with exports totaling 106,109t, up from just 9,454t in March 2021. Trade sources said the US was the preferred alternative supplier in a volatile market. Russia ranked third in scrap exports to South Korea at 47,120t, which was 76.8pc and 14.8pc higher year on year and month on month, respectively. Looking ahead, sources expect imports to taper off in April as most South Korean buyers started to shun the import market as prices remained at record highs in late March. "I'm not sure if [South Korean] mills will find it sustainable, or even make a profit, buying scrap at such a high price," a trader said.