South Korea: Structural steel pipe output falls by over 8%, y-o-y, in Q1CY'22

There is growing interest in whether domestic demand for structural steel pipe products will recover in Q2CY'22 as both production and sales in Jan-Mar'22 decreased compared to the same period of the previous year.

In addition, demand recovery is still slow because of price hikes due to raw material supply disruptions.

The production of structural steel pipes in Jan-Mar'22 was 566,915 tonnes (t), a decrease of 8.2% compared to the same period of the previous year, according to the Korea Steel Association.

The production and sales of structural steel pipes are not showing signs of recovery, except for potential demand, despite the movement to raise product prices due to the rise in raw material prices since March.

The production and sales of steel pipes decreased compared to last year due to difficulties in securing raw materials in both the domestic and overseas markets, while the price hike was announced in March and the recovery of major end-user industries such as construction was quite sluggish.

Output

It is presumed that the production of steel pipes decreased because it was difficult to secure raw materials such as hot-rolled coil and hot-dip galvanised steel sheets in domestic and overseas markets and sales remained stagnant as a result.

Meanwhile, the production of structural steel pipes in March was 201,778 t, a 17.5% increase month-on-month (m-o-m), and a 3.5% decline year-on-year (y-o-y).

Demand, sales and exports

In terms of sales, domestic demand was 476,610 t in Jan-Mar'22, a decrease of 4% y-o-y, and exports were assessed at 87,525 t, down 1.6% y-o-y.

Sales surged 15.1% in March at 211,311 t, compared to February, while sales decreased by 1.5% from the same month of the previous year.

The actual sales volume in Jan-Mar'22 was recorded at 566,135 t, down 3.6% from the same period of the previous year.

In terms of sales, exports were 31,324 t in March, an increase of 31.7% from the previous month and 8.2% from the same month of the previous year.

Outlook

Although structural pipe makers are raising prices in the second quarter, sales have not recovered significantly except for the impact of difficulties in securing raw materials.

Pipe manufacturers are pushing for a price increase in May owing to the increasing burden of raw materials and other manufacturing costs.

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