South Korea: Share of domestic steel sales rises for Posco, Hyundai Steel

The share of domestic sales of hot rolled steel products in total sales is steadily on the rise for South Korea's leading steel companies - Posco and Hyundai Steel.

The proportion of domestic sales in total sales was 67.7% until Oct'21, which was 9% higher compared to the same period of the previous year, according to SteelDaily reports.

Domestic demand

It is expected that domestic sales will continue to increase for the time being, reaching 70% of total sales by the end of the year. Meanwhile, steel imports are expected to decline until early next year.

The total external sales volume until Oct was 9.46 million tonnes (mn t), a decrease of 8% compared to the same period of the previous year. Exports fell by 28% to 3.06 mn t, while domestic sales stood at 6.4 mn t - an increase of 7% compared to the same period of 2020.

Although, overall sales declined, the proportion of domestic sales in total sales increased significantly as domestic steel demand increased in South Korea.

Imports of hot-rolled wide steel strips were at 1.96 mn t in Sep, a decrease of 4.5% compared to the same period of the previous year.

In addition, offers from major Chinese exporters remain suspended since Nov, and imports in Q4 CY'21 are expected to inch down further.

Outlook

The share of domestic sales of hot rolled products in total sales is expected to reach 70% by end-2021 and it is likely that the proportion of domestic sales may continue to increase due to drop in imports.

Owing to the renovation of Posco's Gwangyang No. 4 blast furnace in the first half of next year, there is a possibility of reduction in supplies of hot rolled products. Moreover, an increase in domestic demand is inevitable for the time being and market participants are awaiting for domestic demand to recover.