South Korea: Sales of HR products, heavy plates' remain dull in Jan

With the Lunar New Year holiday approaching , South Korea's domestic sales of hot-rolled (HR) and heavy plates are sluggish this week, especially since there is no difference between the manufacturers' shipment prices and distribution prices of domestic HR products.

Hot-rolled products

In the third week of January, domestic hot-rolled products were traded at 1.11-1.12 million won per tonne (t) ($931-939/t), but in other regions these were at less than 1.1 million won/t ($922/t).

On the other hand, imported hot-rolled products were sold at won 1.11-1.12 million won/t ($931-939/t), and imported hot rolled products were sold at 1.08-1.09 million won/t ($906-914/t).

Heavy plates

Domestic heavy plates were traded at 1.15-1.17 million won/t ($964-981/t), while imported heavy plates were traded at 1.12-1.13 million won/t ($939-948/t).

There were expectations of an improvement in sales in the market during late Jan'22 with respect to heavy plates, which seem to have disappeared. As market prices weakened, customers continued to wait for purchases. South Korean heavy plates' manufacturers had attempted to sell aggressively in early Jan'22, but trade volumes decreased for two weeks in a row, and distribution prices remained flat.

There is no difference between the manufacturer's shipment prices and the distribution prices of domestic HR products, which is causing concerns among hot-rolled distributors. This is because sales are continuing at a loss when processing costs are taken into account.

"Since the economy is not very good, there is no demand and prices have come down as each distributor lowers his unit price. Sales of heavy plates are not going well and we are hoping that sales will pick up after the Lunar New Year," said a hot-rolled distributor.

The retail market is focused on HR and heavy plates' prices in February. There is a growing interest in whether domestic manufacturers will release a 'freeze' or 'raise' card for prices of hot-rolled and heavy plates distribution in February.

Outlook

"As there is a possibility of POSCO undertaking its blast furnace repair and probable reduction in Hyundai Steel's hot-rolled sales, the distribution prices are expected to rebound in February," stated a hot-rolled distributor.

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