Posted on 23 Aug 2023
In the first half of this year South Korea’s steel imports showed an increase of over 10% compared to last year. This significant rise in imports is attributed to fluctuations in the exchange rates of major importing countries like China and Japan coupled with a domestic industrial boom leading to a surge in low-priced imported products.
According to the Korea Iron and Steel Association on Aug. 22, the import volume of steel materials in the first half of this year reached 8,301,000 tons, a 10.6% increase compared to the previous year. This is significantly higher, nearly 10-20%, than the average of around 7 million tons seen over the past three years since the onset of the COVID-19 pandemic.
When breaking it down by country, imports from China and Japan, which account for over 90% of the total imports, increased by 37% and 8% respectively. This was due to the relatively weaker exchange rates offered by China and Japan from the previous year. Additionally, the downturn in China’s real estate market meant that unsold stock flooded into Korea, further affecting the numbers. The influx of these cheaper imported steel products has led to a widening price gap between domestic and imported products.
The booming domestic industries, including the shipbuilding and automobile sectors, have also impacted the increased steel imports. Imports of plates, heavily utilized in these sectors, surged by 24.6% year-on-year, marking 4.88 million tons. Industry insiders predict that given the volume of ships under construction plate imports used in shipbuilding could exceed 2 million tons this year, the highest since 2017. While the import of electric steel plates saw a 16.4% increase due to the booming electric vehicle market, a slowdown in the domestic construction industry resulted in a noticeable decline in rebar imports. The rebar imports in the first half of this year have decreased by approximately 31% compared to the same period last year.
Domestic steel companies are apprehensive that the trend of increased steel imports will continue in the second half, potentially undermining the price competitiveness of domestic products. Fluctuations in the yuan and yen exchange rates are seen as the most significant external variables for this year’s steel imports.
Source:Business Korea
