South Korea: Structural pipe makers to raise prices shortly

Major South Korean structural pipe makers like Hanjin Steel Pipe, Dong-A Steel and Yuhwa Steel Pipe and Yuil Steel Pipe Ltd will raise prices of their key products from the third week of March. These companies had raised their prices previously to improve their margins owing to the continuous economic downturn.

Recently, Dong-A Steel decided to raise its prices by 7-9% for steel pipe products for shipments from 14 Mar'22 onwards. The company will also hike prices of C-beams by KRW 70-80/kg through a price-hike notice to its customers.

Hanjin Steel Pipe announced that it would raise prices of all steel pipe products by 7%, to be effective from 15 Mar'22.

The companies have announced plans to hike prices of structural steel pipes owing to the increased production cost burden. The cost of production has increased due to the increase in subsidiary materials, high oil prices as well as an increase in the cost of raw materials.

Cost burden and supply constraints

Against the backdrop of an unstable global environment, the cost burden has been increasing and supply constraints are getting worse due to the increase in logistics costs owing to disruptions in supply and demand, and the maintenance schedule of domestic end-user companies.

Structural pipe makers said that raw material prices are continuing to rise, and they are concerned about the price hikes and supply cuts for domestic hot-rolled (HR) products. That apart, prices of imported Chinese HR products are rising to around $920/tonne (t).

In addition, the pipe manufacturers had no choice but to actively raise prices of steel pipe products in order to secure profits, as logistics costs are continuously rising.

Although every company raised prices of structural steel pipes in mid-February, the prices were significantly lowered later due to growing competition for securing orders. Besides, there is a strong possibility of further increase in prices due to the uptrend in raw material purchase prices. Furthermore, POSCO has also increased prices of structural tube products.

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