South Korea Steel Mills to Raise Domestic HRC Prices Amid Maintenance Shutdowns

Major South Korea based steelmakers are planning to raise the domestic HRC prices amid planned maintenance shutdowns. As per market sources Korean steel mills are likely to increase the prices of HRC in Q4 CY17 by Won 30,000/MT (USD 26.7/MT) in domestic market. Domestic prices are increasing since the major mills in Korea are shutting down their operations for maintenance purpose.

A local trader based in Korea commented that "steel mills will remained closed for around 40-45 days resulting to huge losses in production volumes for the steel companies"

As per industry participants, this maintenance shutdown at two major South Korean mills will hamper production to the extent of around 9,50,000 MT in the mentioned time frame.

Market participants also shared that South Korean steel mills have kept themselves away from quoting export offers in overseas market and are currently holding their offers. Last offers are heard in the range of USD 580-600/MT FoB South Korea.It is expected that flat steel export volumes from South Korea may observe decline in the coming months.

According to customs data maintained with SteelMint, South Korea exported 1.9 MnT flat steel in Sept'17, down by 2.5% M-o-M. In first nine months of CY17 (Jan-Sep) country's flat steel exports rose slightly by 0.7% to 17.02 MnT which was 16.9 MnT in similar time-frame of previous year.

Reduced steel export volumes from China in the overseas market and less supply from South Korea will provide enough room for other countries to raise their export offers.

A question that remains unanswered is will fall in steel export volumes from China and South Korea result in hike in global export offers ? And will this in turn support Indian domestic flat steel prices ?