South Korea: POSCO's price freeze could spark hope for carbon steel pipe market

POSCO, South Korea's largest steelmaker, has decided to freeze the domestic hot-rolled steel supply price in August, a move that could help to stabilise the carbon steel pipe market. This has caught the attention of many, as people wonder if this will lead to changes in the domestic carbon steel pipe market, as per Steel Daily report.

A POSCO official stated that they made this decision because the price of hot rolled steel for overseas markets is rebounding. They also believe that the steel market conditions, both domestically and internationally, will improve after September. Therefore, they have chosen to freeze the unit price of domestic hot rolled steel supply for the month of August.

Impact on carbon steel pipe manufacturers

Carbon steel pipe manufacturers have been struggling due to lower product prices. This has resulted in deficits that have not been resolved. Additionally, factors such as sluggish demand, intense competition, consumer expectations of price declines, and an increased inventory have further worsened the profitability of pipe manufacturers in the first half of the year.

Given this situation, there is growing interest in whether POSCO's decision to freeze steel prices can provide an opportunity for the carbon steel pipe market to recover. Currently, carbon steel pipe prices are at a low point.

For example, as of the 4th week of July, the domestic retail price for 2mm black pipe for carbon steel structural use is around KRW 900,000 per tonne. Similarly, the price for 100A black pipe for plumbing is around KRW 1.1 million per tonne.

Potential for price recovery

After the freeze on domestic hot-rolled steel prices in August, there is hope that the carbon steel pipe manufacturing industry will be able to raise prices and recover profitability. This is a crucial opportunity for the industry, which has been struggling with low prices and financial challenges.

Overall, the decision made by POSCO to freeze steel prices has sparked hope for the carbon steel pipe market. It remains to be seen how this will unfold and whether it will lead to a positive change in the industry's fortunes.