SEOUL, July 9 (Reuters) - Resource-hungry South Korea plans to triple its base metal reserve stockpiles to ease tight domestic supply as manufacturers struggle to secure raw materials due to soaring commodity prices, the government said Wednesday.
South Korea, home to the world's largest shipbuilder, No. 1 memory chip maker and No. 4 steel mill, plans to raise reserve stockpiles on 12 key products, including copper, aluminium and nickel, from 19 to 60 days worth of supply. It will also expand stockpiles to cover 10 more materials.
Asia's fourth-largest economy depends almost completely on imports of copper, zinc, nickel, lead and iron ore.
"The move is to reduce pressure on corporates in securing industrial raw materials and to help stabilise supply and demand conditions," the Ministry of Knowledge Economy said in a statement.
South Korea is set to pay 30 percent more this year to import industrial raw materials worth $8.5 billion, up from $6.5 billion last year, as global commodities continue to rally to record highs.
Three-month aluminium <MAL3> on the London Metal Exchange has jumped nearly 40 percent this year, hitting a record high of $3,327 a tonne on Monday, as soaring energy prices pushed up production costs.
Prices of copper <MCU3>, which hit record high of $8,940 a tonne last week, have also risen by nearly a quarter this year.
South Korea also plans to create scrap metal processing firms in a bid to ease short supply conditions of the major feedstock for electric arc furnaces operated by mini-mill steelmakers, as prices of scrap metal are at record highs.
The state-run Public Procurement Service is responsible for building reserve stockpiles of non-ferrous metals for local small and medium sized firms and spends around 550 billion won ($537 million) per month to secure them.
($1=1023.5 Won)
(Reporting by Miyoung Kim; editing by Jonathan Hopfner) - nt/ng
