With domestic supply tight, why are South Korean steelmakers cutting back on scrap steel imports?

Category: Blog

Category: Industry News

Time:2026-06-12

With domestic supply tight, why are South Korean steelmakers cutting back on scrap imports? Despite ongoing domestic shortages, South Korea’s black scrap imports have declined: in May, imports totaled 60,214 tonnes, up 4.8% month-on-month but still down year-on-year. Steel mill purchasing managers increasingly believe that without boosting imports, it will be difficult to improve the supply‑demand balance. However, weak profitability continues to curb purchases of relatively expensive imported scrap. According to a steelmaker official quoted in the article, import scrap prices would need to fall sharply before companies could seriously consider ramping up procurement.

With domestic supply tight, why are South Korean steelmakers cutting back on scrap steel imports?

 

Despite ongoing domestic shortages, South Korea’s imports of black scrap steel have declined. In May, imports totaled 60,214 tonnes, up 4.8% month-on-month but still at a year-on-year low.

　　By country, Japan accounted for the largest share, at 54,023 tonnes, down 9.7% year on year but up 13.4% month on month. Imports from the United States totaled 1,181 tonnes, while no imports were recorded from Russia. Imports from other regions amounted to 5,010 tonnes, including 2,298 tonnes of scrap steel from the Philippines and 1,143 tonnes from Oceania.

　　Domestic scrap steel imports have been declining since peaking at 543,362 tonnes in March 2022. The primary drivers of this decline are reduced domestic consumption, a widening price gap between domestic and international scrap markets, and steelmakers’ growing preference for domestic sourcing to enhance profitability. In May, the average import price of scrap stood at USD 379 per tonne, while Japanese‑origin material averaged USD 375 per tonne. Based on the average exchange rate for May, the import cost was approximately KRW 565,000 per tonne.

　　From January to May this year, cumulative imports totaled 402,236 tonnes, down 33.5% year on year. Japan accounted for 363,690 tonnes, or 89.6% of the total, followed by Russia (15,765 tonnes) and the United States (7,196 tonnes).

　　In May, scrap steel exports totaled 32,453 tonnes, up 54.5% year on year. Although this figure remains modest relative to the domestic market size, export volumes have posted robust growth since the second half of last year. From January to May, cumulative exports reached 104,604 tonnes, down 24.1% compared with the same period last year—when a temporary surge was driven by shipments aboard large bulk carriers. The average export price stood at USD 399 per tonne.

　　Exports of the key steel products—reinforcing bar and H‑beam—have posted robust growth. In May, reinforcing bar exports totaled 58,558 tonnes, more than six times the level of the same period last year, with cumulative exports from January to May reaching 466,323 tonnes, compared with just 4,526 tonnes in the corresponding period last year. Meanwhile, H‑beam exports in May stood at 118,921 tonnes, up 82.6% year on year, while cumulative H‑beam exports from January to May amounted to 395,888 tonnes, a 5.9% increase over the same period last year.

　　The growth in exports of rebar and H‑beams is unlikely to be a temporary phenomenon. With U.S. demand remaining robust, steelmakers view exports as a key tool for boosting capacity utilization. For H‑beams, persistently high domestic prices in the United States continue to underpin export profitability. Both Hyundai Steel and Dongkuk Steel are expected to focus on exports in the near term; Dongkuk Steel has even established a dedicated export team this year to actively promote overseas sales of both rebar and H‑beams.

　　Over the past three years, the domestic scrap steel market has operated largely independently of the international market. As steel mill demand weakened and imports contracted, domestic scrap prices remained below global levels, dampening import activity. However, the primary factor that had previously weighed on scrap demand—domestic rebar consumption—is now beginning to recover. Without the recent surge in steel exports, even with monthly imports staying below 100,000 tonnes, supply and demand could remain balanced. By contrast, rising exports of rebar and long products are gradually tightening the scrap steel market.

　　Steel mill purchasing managers are increasingly of the view that, without increasing imports, it will be difficult to improve the supply‑demand balance. However, weak profitability continues to curb purchases of relatively expensive imported scrap steel. According to a steel mill official quoted in the article, import scrap prices would need to fall sharply before the company would seriously consider ramping up import procurement.

 

 

 

 

Keywords: With domestic supply tight, why are South Korean steelmakers cutting back on scrap steel imports?

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