South Korea: Heavy plate shipment falls by 2% m-o-m in Nov'23

POSCO, Hyundai Steel, and Dongkuk Steel, the three domestic heavy plate companies' total shipment fell by 2% m-o-m in November 2023 compared to the previous month, reaching 732,000 tonnes (t), as per a recent report. Moreover, these three companies failed to break the 750,000 t barrier in November 2023.

Domestic heavy plate steel is struggling to pick up after a period of sluggish sales. This is largely due to a lack of major new projects, which are a key driver of demand in this industry.

Decline in domestic and export sales

In November 2023, domestic sales fell by 1.3% m-o-m against previous month, reaching 535,000 t. This decline contributed to a decrease in overall sales volume, the major contributing factor behind this drop was a decrease in cargo volume, which was caused by both a general slump in demand and excess inventory in the market.

Export performance also remained sluggish in November 2023, failing to exceed 200,000 t per month. This was due to a decrease in contract volume as the year drew to a close. The three domestic heavy plate companies exported a total of 197,000 t in November 2023, marking a 3.1% m-o-m as compared to last month.

Increase in production, despite sluggish demand

Despite the sluggish sales, heavy plate production witnessed a slight increase in November 2023. The three companies produced a combined total of 777,000 t, marking a 0.8% m-o-m rise compared to October 2023.
This increase can be attributed to the completion of major repair schedules at POSCO and Hyundai Steel's heavy plate plants in September and October 2023, respectively, which facilitated a return to normal operating rates.

Cumulative Performance

While the current market conditions are challenging, it is important to note that cumulative production and sales for the year remain above the same period in 2022.

From January to November 2023, cumulative production reached 8.08 million tonnes (mnt), representing a 5.2% y-o-y increase in comparison with previous year. Similarly, cumulative sales reached 7.9 mnt, marking a 4.7% y-o-y increase.

Further analysis reveals that cumulative domestic sales for the period totalled 5.73 mnt, representing a 1.8% y-o-y decrease compared to the previous year.

Moreover, cumulative overseas sales for the period saw a significant increase of 26.3% y-o-y, reaching 2.2 mnt.

Outlook:

The industry faces challenges in the short term due to sluggish domestic demand and excess inventory. However, strong cumulative performance, increased overseas sales, and potential future growth drivers offer long-term hope.

Note: This article has been written in accordance with an article exchange agreement between Steeldaily and SteelMint.