2024.09.19. The Fair Economy — The Public Procurement Service's stockpile program, which stockpiles six non-ferrous metals to stabilize supply chains, has failed to meet its target inventory for four consecutive years since 2020.
According to the 'Stockpile Inventory Status of the Public Procurement Service for the Last Five Years' data submitted by the Public Procurement Service to Rep. Jung Tae-ho of the National Assembly's Strategy and Finance Committee, the agency exceeded its target inventory by 7.8 days only in 2020, while falling short by 2.3 days in 2021, 11.4 days in 2022, and 9.7 days in 2023. As of August 2024, the stockpile remains 4.3 days short of the target.
The Public Procurement Service stocks six non-ferrous metals—aluminum, copper, nickel, tin, zinc and lead—to prepare for supply chain crises. These metals are used in key industries such as secondary batteries and electric vehicle batteries, driving high domestic demand, yet most of the raw materials are imported. The agency releases a portion of these stockpiles on an ongoing basis throughout the year to help stabilize domestic prices and support stable operations for small and medium-sized manufacturers.
As of August 2024, among the six non-ferrous metals, only lead and zinc, which have internationally competitive manufacturers, were held above target inventory, while the inventories of aluminum, copper, tin, and nickel fell short of the target.
In particular, the operational stock of non-ferrous metals used to support small and medium-sized enterprises facing difficulties in raw material supply also fell short for four metals: aluminum by 10 days, copper by 16 days, tin by 14 days, and nickel by 5 days.
The warehouse infrastructure built to facilitate smooth stockpiling is also insufficient.
To hold the target inventory, the Public Procurement Service needs 28,524 pyeong of warehouse space.
However, the area currently secured by the agency is 14,200 pyeong, which is only 49.8% of the warehouse space needed to meet the stockpile target.
The problem is that securing stockpile warehouses can take considerable time.
First, to expand stockpiles, the Public Procurement Service is building a new 3,275-pyeong stockpile warehouse in Gunsan, targeting completion in May 2025.
For the leased warehouse from the Korea Mine Rehabilitation and Mineral Resources Corporation (7,559 pyeong), the corporation plans to build a new stockpile warehouse by the end of 2026.
However, if the construction of the new warehouse does not proceed smoothly, the space will only be secured after all nine types of rare metals that the Public Procurement Service agreed to transfer to the Korea Mine Rehabilitation and Mineral Resources Corporation are transferred. Currently, only one type, cobalt, has been transferred, and the transfer plan is delayed, which is expected to cause difficulties in securing the stockpile warehouse.
In addition, even considering the increased area of 1,076 pyeong from the reconstruction of the Gyeongnam warehouse, the future available area is 26,110 pyeong, which is 2,414 pyeong short of the required 28,524 pyeong.
Rep. Jung Tae-ho said, "In an era where resource security is important, supply chain crises can recur at any time," adding, "The repeated annual shortfall in the Public Procurement Service's stockpile inventory could create difficulties for small and medium-sized enterprises that face relatively greater challenges in raw material supply."
He added, "It is necessary to build a stable stockpile warehouse infrastructure through the swift transfer of non-ferrous metals agreed upon between the Public Procurement Service and the Korea Mine Rehabilitation and Mineral Resources Corporation."
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