South Korea scrap imports down 16.5% in 1H

South Korea's imports of ferrous scrap declined by 16.5% year-on-year in the first half of 2026, totaling 750,000t. This downturn is attributed to reduced steel production and a persistent price difference between domestic and international scrap markets. Japan continued to be the leading supplier, providing 74.5% of the imported scrap, favored for its flexible vessel size rules and yen-denominated contracts that mitigate exchange-rate risks. South Korean mills have largely relied on long-term contracts with Japanese suppliers and have avoided the spot market for two years. They re-entered the seaborne market in late May seeking Japanese scrap amid rising domestic prices, but this interest waned as prices fell in July. Imports from the United States experienced the most significant decrease, as mills steered clear of large bulk shipments exceeding 30,000t. Historically, South Korea imported over 6 million tonnes annually before 2020, with volumes between 4-5 million tonnes from 2020-2023. Imports fell below 2 million tonnes in 2025 for the first time in three decades due to weakening demand. The country's domestic ferrous scrap self-sufficiency rate stands at approximately 95%, enabling mills to meet most of their requirements locally and procure seaborne material primarily for prime grades or when international prices are competitive. The steel industry faces ongoing challenges from sluggish construction activity and intense competition from low-cost imported steel products, suggesting scrap demand will likely remain subdued as long as steel output stays low. In the first half of the year, South Korea exported 261,000t of scrap, mainly to India, Vietnam, and Bangladesh.