South Korea: Hot-rolled steel sales decline 5.8% m-o-m in Aug'23

South Korean steelmakers, POSCO and Hyundai Steel, witnessed a decline in sales volumes of hot-rolled steel by 5.8% m-o-m to 895,000 tonnes (t) in August 2023. This decline can be attributed to various factors, including a recession in domestic demand and a reduction in production.

Sluggish domestic demand

In August, domestic sales fell for the fourth consecutive month to 515,000 t, reaching the lowest point of the year. This can be attributed to a slowdown in demand from downstream industries, a decrease in orders from companies due to increased costs, and the low-price export strategy of Chinese and Japanese companies.

Increase in import volumes

In August, the amount of imported hot-rolled steel into Korea increased by 19.7% m-o-m to 325,000 t. The average unit price of Chinese products was around $570/t, making them a competitive option compared to domestic products.

Relatively strong exports

Despite the decline in sales, exports of hot-rolled steel performed relatively well. In August, a total of 380,000 t of hot coils were sent overseas. Although this was a 5.0% decrease from the previous month, it was still a decent performance compared to previous months.

Drop in production volume

As sales slowed down, production also dropped. In August, the two blast furnace companies' external sales hot-rolled production amounted to 915,000 t, a 5.7% decrease m-o-m against July 2023. This decline can be attributed to adjustments made by the companies ahead of their regular hot-rolling facility repair schedules.

Upcoming repairs

POSCO Gwangyang Steel Mills and Hyundai Steel have scheduled repairs for their hot-rolling mills in September. These repairs will temporarily reduce production capacity and allow for necessary maintenance work.

Cumulative performance (January-August 2023)

During January to August, the cumulative production of hot-rolled steel for external sales increased by 7.3% y-o-y to 7.637 million tonnes (mnt) compared to the previous year. The cumulative sales volume also saw a 4.8% y-o-y increase to 7.544 mnt compared to the same period of the 2022.

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