What is the Outlook for South Korean Steel Market in August ?

In the month of July,domestic coil prices surged by Won 20,000-30,000/MT.However by the month end prices dropped by Won 10,000-20,000/MT over subdued demand and weak buying.

Limited jobs in automobile,construction and household sector has led to higher inventory levels which are mainly produced by the distributors.

Chinese HRC export offers also declined by about USD 10/MT towards the end of July resulting in putting South Korea’s domestic prices under pressure.

Outlook for August- In the month of August major Korean based steel companies Hyundai steel and POSCO are planning to increase prices in the month of August.POSCO may raise HRC prices by Won 20,000-30,000/MT for August in order to secure more orders and gain higher profit margins.

Meanwhile demand from construction and household sector may witness growth along with recovery in freight from mid August .Thus these factors in turn contribute in increasing HRC prices in South Korea.

Domestic Sales up by 11% in H1CY18 (Jan-Jun)-In H1CY18 (Jan-Jun) POSCO recorded 11.4% of growth in domestic sales to 3,120 thousand tons against 2,800 thousand tons in first half of previous year.

Similarly Hyundai Steel reported significant growth of 44.7% to1,049 thousand tons in H1CY18 against 725 thousand tons in H2CY17.

However exports of POSCO decline by 8% to 1,480 thousand tons in Jan- Jun’18 against 1,610 thousand tons in Jan-Jun’17.

HRC Production & Sales Quantity of Two Companies