South Korea: POSCO to raise wire rod prices on cost-push

The leading South Korean steelmaker POSCO is planning to hike wire rod prices due to the rally in raw material prices and the increase in imported wire rod prices.

POSCO has not been actively raising prices owing to lacklustre demand but with surging raw material (iron ore and coking coal) and steel products (hot rolled products) prices, the company decided to increase its wire rod prices.

Given the current market scenario, a price hike of KRW 50,000-100,000 per tonne (t) ($42-83/t) will be announced within the next month, as per a SteelDaily report.

Despite the delay in demand recovery, prices of iron ore Fe 62% has breached $130/t CFR levels, and those of Australian coking coal have been rising since the second quarter of last year, registering at $440/t. Wire rods prices from China and Southeast Asia have risen by $60/t since Nov'21. Current offers of mild steel wire rods from Southeast Asia stand at $822/t.

Outlook

Considering the current market scenario, it is expected that the domestic wire rod manufacturers will have no choice but to announce price hikes soon. However, the time is yet to be decided. The producers will raise prices in line with the price movement in the international market.

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