South Korea: Steel exports witness mixed trends in May '21

South Korean steel exports witnessed mixed trends in May '21 owing to the impact of the resurging Covid-19 cases in the country.

Key segments

• Semi-finished steel exports surged 46% m-o-m to 55,236 tonnes (t) in May '21 as against 37,806 t reported a month ago.
  
  
• Finished long steel exports fell by 11% m-o-m to 1,70,677 t in comparison to 1,90,974 t in the previous month.
  
  
• Finished-flat steel witnessed a marginal 1% decline to 18,16,953 t against 18,41,343 t in Apr '21.
  
  
• Ferro alloys exports were recorded at 17,784 t, up by 49% as against 11,905 t recorded a month ago.
  
  

Performance of steel-end-user segments

1. Manufacturing up but demand takes a hit: Korean manufacturing industries' production has been up but they have taken a hit in sales numbers as the recent Covid-19 wave shook the country.

For instance, automobile production surged by 11% y-o-y on increased outbound shipments to 256,272 units in May '21 against 231,084 units in the corresponding period last year, as per the data released by the Ministry of Trade, Industry and Energy (MoTIE).

But, domestic sales dropped by 10% y-o-y to 151,699 units in May '21 as against 137,908 units in the year-ago period.

2. Export offers witness increase: The export offers for finished steel have witnessed significant increase in the past couple of months.

The monthly average HRC export offers, for instance, have spiked by about 19% from $740/t FoB in Mar '21 to $790/t FoB in Apr '21. And, this further increased by 11% to $936/t FoB in May '21.

The increase in global HRC offers backed by the removal of the export rebate of 13% and an anticipation of imposition of export taxes on steel products by the Chinese government fuelled this increase.

3. US to reduce anti-dumping rates on Korea's steel product: The US Department of Commerce has revised its preliminary anti-dumping duty rates applied on carbon steel, thick plates and alloy steel products imported from South Korea. The duty stands at 0.68% from 15 Jun '21.

Major target companies were Dongkuk Steel, Hyundai Steel and Sungjin Steel.

Crude steel output slashed in Apr '21: Korea, the world's fourth largest steel producer, churned out 5.90 mn t of crude steel in Apr '21, down by 3% m-o-m as against 6.10 mn t a month ago, as per the latest data released by World Steel Association on 21 May '21. Resurgence of Covid-19 cases in the country has dented domestic demand and production volumes.

However, May figures are yet to be announced.