As Chinese pre-coated steel sheets rise into Korean market the industry is increasingly concerned over the Korean market. According to the Korea Iron and Steel Association, the import of pre-coated steel sheets increased in March, up 23.5 percent over a year ago totaling 25,356 metric tons, of which 25,126 metric tons were imported from China.
Under the standstill of demand at the market, the rising Chines materials are making the Korean industry feel uneasy. Korean real consumers may expand the consumption for Chinese materials which are in favor of cheaper price compared with the Korean product.
The competition among Korean producers as well as rising import of low-priced Chinese materials is big problem to the Korean industry, under the people familiar with the issues.
Meanwhile, the Korean cold rolled flat product industry is taking work forward to increase prices in an attempt to get out of the sales loss, the industry people confirmed. Notwithstanding, there remains sales loss even in April, they added.
According to the industry source, the Korean cold rolling re-rollers including Dongkuk Steel and Dongbu Steel suffered sales loss in January and February both, but took work to raise prices entering into March, getting out of the difficulties. That said, they could avoid the red, wrapping far from profit.
However, they appall at the sales loss in April again, as the starting materials on which POSCO increased its offering price increases are scheduled to be fully put into the production line. Thus, the industry argue it is necessary to raise the prices. However, the industry takes cautious of the timing to take price increases considering the resistance from the end-users.
However, the problem exists still given the lack of consumption on the market, because the imported quantities are reducing from China which mills placed higher export offers for April. In April, Chinese mills increased their export offer prices for galvanized steel sheets upgrading $10 per ton around from March. China’s Baotou Steel and Rizhao Steel suggested $659 per ton, cfr, and $640 per ton, cfr respectively, while Baotou Steel limited its export quantities from 15,000~20,000 tons to 10,000 tons range in April, and the Korean consumers tiled to contract with Rizhao Steel.
In April, the deals have been proceeding largely between Chinese mills and Korean piping mills. Although Chinese mills’ prices remain higher, the Korean consumers are seen in proceeding contracts with Chinese mills in order to lower the cost of production. For a while to come, Chinese mills will likely maintain high level of export offer prices, so long as the Korean pipe producers are willing to cut the cost-push burden.
Source: Steel&Metal News |
