South Korea's HRC market to remain under pressure in Aug'22, demand to improve from mid-month

The domestic HRC market in South Korea is expected to remain under pressure in August due to cheaper imported HRCs offers from China.

China's HRC (SS400) export offers have bottomed out in end-July, reaching the lowest levels of $600/t CFR for September shipments. Now the declining trend seems to have slowed down on the back of expected steel demand recovery and the consequent rise in Chinese futures.

However, imported prices into South Korea will inevitably continue to fall until September shipments which may weigh on domestic prices.

In July, South Korea's HRC sales remained weak and this trend is expected to continue in August due to subdued demand and falling prices.

Buying activity to improve in mid-Aug

Demand for HRCs, however, is likely to improve from mid-Aug due to lower inventories with stockists and traders. In addition, demand from country's automobile and construction industry may recover post mid-August, which was dull due to the summer season.

However, it is difficult to expect a rapid recovery in demand amid domestic and global economic downturn.

Will prices rebound?

There is very less chance that prices will rebound due to the sharp drop in steel making raw material (iron ore and coking coal) prices.

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