South Korea: Construction, home appliance may drive colour steel sheet demand in CY'22

The South Korean colour-coated steel sheet industry has been on the front foot since last year when it started expansion and operation of its colour coating line (CCL) facilities. The industry majors are looking forward to a growth in demand from the major steel-consuming industries such as construction, and home appliances in CY'22.

Construction of new logistics warehouses
The increase in demand for warehouses on the back of expansion of e-commerce activities during the Covid-19 era had driven the construction of new warehouses in CY'20. The numbers show that new registrations for logistics warehouses spiked to 728 in CY'20 contrasted against 338 in CY'19.

However, moving into CY'21 the new registrations dropped to 203 because of a surge in construction costs and prices of steel materials such as H-beams and rebar. Furthermore, many registrations for CY'21 were deferred to CY'22 for the construction. Thus, industry participants see more of such facilities being built this year to compensate for the slowdown faced in the preceding year.

Korean home appliance industry focuses on differentiated products:
Demand for home appliances may be under pressure in CY'22 after the boom seen for a couple of years amid the Covid-19 crisis and the work from home culture. However, with the home appliance manufacturers focusing on launching differentiated home appliances, industry participants are of the view that they could counter the low pent-up demand effect in CY'22. As such, manufacturers such as LG Electronics, Samsung Electronics and others have introduced artificial intelligence (AI) and robots alongside upgrades in traditional home appliances such as washing machines, air purifiers and television sets to create more demand.

Import trend of colour coated steel to impact domestic players:
Most of the import volumes of colour coated steel come from China which accounts for the lions' share in the global exports market.

Also, the momentum of imports from China has changed this year after witnessing a decline in the second half of CY'21. During 2HCY'21 (Jul-Nov'21), imports from China aggregated to 187,504 t, down 8% against H1CY'21 (Jan-June'21), SteelMint notes.

In Jan-Nov'21 the imports from China surged by 51.5% to around 390,310 t against CPLY.

~ Inputs from Steel Daily