South Korea: Hot-rolled mills' maintenance plans to disrupt supply in H1CY'22

Supply of hot-rolled products in South Korea is expected to remain disrupted in the first half of CY'22 as the key steel mills like POSCO and Hyundai Steel have announced their maintenance plans.

POSCO is likely to renovate its fourth blast furnace in Gwangyang works during Feb-Jun'22 while Hyundai Steel plans to shut down both of its hot-rolling and cold-rolling plants in Dangjin works one after another for repairs. The HR plant will undergo repairs during the Lunar New Year holidays post which the CR plant will go under maintenance.

Imports from Japan decline

Steel giant Nippon Steel's Oita plant, which produces hot-rolled coils used for automobiles and shipbuilding heavy plates, had faced problems at two of its blast furnaces (No.1 and No.2) in Dec'21 because of equipment failures.

In addition, JFE Steel's west Japan Kurahji-gu works, had faced a converter problem in end-Dec'21, which affected 200,000 t of its crude steel production.

This affected the sourcing of hot-rolled materials of major Korean steel mills like Dongkuk Steel and KG Dongbu Steel which are the major buyers of Japanese HR products.

Mills may increase HR imports from China, India

It is pertinent to note that Hyundai Steel has targetted 11 million tonnes (mn t) of plates production and Dongkuk Steel is eyeing 2.3 mn t in CY'22.

Hence, to meet their targets, the Korean mills are likely to turn to the other major steel exporting nations like China and India to source HR products.

"At present, the stock of hot-rolled products is high due to the low domestic market conditions in the fourth quarter of last year. In addition, there is no major problem at present since Japanese steelmakers have reduced the exports volume of hot-rolled products. But as there may be disruptions in the supply of hot-rolled products in the future, we will not be vigilant and will respond flexibly in the direction of increasing imports of hot-rolled products from various countries," said a Korean company official.

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