South Korea: POSCO to decide June prices of stainless steel

POSCO, major stainless steel manufacturer in South Korea, is currently facing difficulty regarding the pricing of its June shipment. Last year, during the June-July period, a significant change occurred in the pricing strategy due to decline in nickel prices and a sluggish market.

Due to limited trades and weak demand in May 2023, POSCO has decided to maintain its prices unchanged. Looking ahead to the June shipments, price forecasts indicate a likelihood of a price freeze rather than a reduction, influenced by the prevailing sentiment in the domestic market.

The main reason behind this decision appears to be the concern of potential inventory valuation losses. However, industry experts are pointing out that as time passes, it is becoming increasingly challenging to improve the situation for sellers experiencing deficits.

When comparing the prices of 304 hot and cold rolled steel in neighbouring Asian countries for both domestic and export markets, it becomes apparent that the domestic distribution price of POSCO's products remains relatively high. In response to this observation, it is widely believed that POSCO will prioritise implementing flexible production and sales strategies instead of immediate price adjustments.

Meanwhile, Korean domestic companies are also facing a growing burden due to immediate inventory valuation losses. The impact of these losses is being felt across various sectors, including manufacturers, distributors, and demand industries, all of which are facing losses.

Unfortunately, many anticipate that the losses will persist and are unlikely to diminish significantly. As a result, it is expected that the second quarter will bring further unavoidable losses to these companies.

Meanwhile, POSCO is in a position to determine the price for shipments in June by conducting a comprehensive evaluation of factors such as raw material prices, domestic market conditions, and overseas market dynamics.

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