The South Korean steel industry is grappling with significant challenges, including a domestic construction slowdown, aggressive Chinese exports, and declining supply prices, according to local media reports.
In Q2 2024, South Korea’s top three steel companies reported sharp declines in operating profits due to the downturn in the construction sector. Hyundai Steel’s construction steel sales fell from 32.9pct of total sales in 2021 to 30.5pct in 2023. Dongkuk Steel’s sales also dropped 18.8pct YoY in Q1 2024 to 693,000 tons.
Chinese steel exports are worsening the situation. The Korea Iron & Steel Association noted that imports in the first half of this year totaled 7.883 mln tons, with Chinese steel accounting for about 60pct (4.725 mln tons), an increase of 76,000 tons from last year. Chinese steel is priced at USD 863 per ton, significantly lower than the global average of USD 977. In comparison, South Korean steel costs USD 2,570 per ton, making it three times more expensive.
