South Korea: Heavy plate manufacturers struggle amid slumping demand and exports
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South Korea's domestic heavy plate manufacturers are facing significant challenges, with sales experiencing a steep decline in April 2024. The combined sales of POSCO, Hyundai Steel, and Dongkuk Steel totalled 628,000 tonnes (t) in April, representing an 18.7% y-o-y decrease compared to April 2023 and an 11% m-o-m drop from March 2024. This marks the first time since the aftermath of the 2022 Hinnamno flooding and strike that monthly sales have fallen below 630,000 t.
Weakening domestic, export markets
The difficulties are evident in both domestic and export markets. Domestic sales in April reached 440,000 t, reflecting a slight increase from March 2024 but a significant 21% decrease compared to April 2023. This suggests a long road to recovery, potentially due to rising consumption of Chinese heavy plates and a decline in overall demand within the domestic industry.
Exports also experienced a significant downturn, dropping by 30.9% y-o-y and 12.8% m-o-m to 188,000 t in April. Although there were no adverse weather conditions, a reduction in orders from overseas companies directly impacted exports.
Production adjustments and maintenance impact output
Production levels have also fallen below normal as manufacturers adjust to the deteriorating demand. Major repairs at heavy plate factories since March have further impacted output. Regular maintenance was conducted at POSCO's Pohang Plate Plant No. 2 and Hyundai Steel's Dangjin Plate Plant No. 1 in late-April.
Negative cumulative production and sales
The negative trend extends to cumulative production and sales figures for the year thus far. From January to April 2024, combined heavy plate production reached 2.794 million tonnes (mnt), reflecting a 4.4% decrease y-o-y compared to the same period in 2023. Sales volume also recorded a 2.6% decline y-o-y, totalling 2.817 mnt.
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