Key Highlights-
- Semi-finished steel dipped by 32%
- Finished long remained stable
- Finished flat was up by 2%
- Ferro alloys showed massive spike
South Korea’s steel export was impacted by the third wave of COVID from Dec ’20. Export volumes have showed varied responses to the stricter precaution measures and are noted below:
1. Semi-finished- Korean mills exported 28,978 t of semis in Jan ’21 which was 32% down in comparison with Dec ’20 volumes at around 42,852 t. It was also lower by 42% on a yearly basis.
Country-wise exports- Chinese mills acquired 6% lesser semi-finished goods from Korean mills, volume stood at 34 t in Jan ’21 compared to 36 t in Dec ’20. Meanwhile, exports to Japan surged by 59% to 25,830 t in Jan ’21 as against 16,269 t in Dec ’20.
Further, exports to Taiwan and Vietnam stood zero in Jan ’21 from Korean mills.
2. Finished-long- Exports of long products remained largely stable on m-o-m basis at 1,60,221 t in Jan ’21 as against 1,60,317 t a month ago. However, on a yearly basis the same declined by 19% from 1,97,530 t in Jan ’20.
Country-wise exports- Korean mills exported around 18,329 t long products to Malaysia in Jan ’21, dipping by 4% from 19,014 t in Dec ’20. South Korea increased its exports to Canada at 9,819 t and Thailand at 12,976 t in Jan ’21.
3. Finished-flat- Exports of finished flat stood at 19,47,353 t in Jan ’21 against 19,15,535 t in Dec ’20, up by 2% on m-o-m basis. On the other hand, the same declined by 4% from 20,24,315 t in Jan ’20 on a yearly basis.
Following are the factors affecting finished-flat steel exports –
a. Sluggish downstream demand- The slower growth in the domestic downstream steel consuming sectors pushed the exports volumes upward in Jan ’21.
- Automobile sector reported a decline of 9% m-o-m with only 296,895 units produced in Dec ’20. Sales of domestically produced automobiles went down by 7% on the month to 131,872 units in Dec ’20. Mentioned figures were released by the South Korean Ministry of Trade, Industry and Energy (MOTIE).
- Ship builders were also hit by order cancellations with customers unable to meet payment deadlines. Korea Shipbuilding & Offshore Engineering (KOSE) reported in local media that it has achieved 90% of its 2020 targets and received orders for a total of 116 ships valued at approximately $10 billion. However, the industry is expecting increased orders in H2 CY ’21 and in CY ’22.
- Winters weigh on construction industry activities- The Dec-Mar period marks the freezing cold and snowy winter season in South Korea that hinders construction and allied activities keeping the domestic consumption of steel low. This also factors-in for the increased exports volume during the month.
b. Resurgence of COVID- Towards the end of Dec ’20 the daily COVID case count peaked to 1,132 cases in a single day attracting stricter measures from the government agencies. This dented the downstream industrial production and thus weighed on domestic consumption of steel and in turn increased export activities.
Country-wise exports- Major importing nations for finished flat goods from Korean mills were Japan at 2,75,737 t (up by 10%), India at 2,31,635 t (up by 18%), United States at 1,76,375 t (up by 10%) and Vietnam 98,643 (Up by 4%) in Jan ’21. However, exports to China declined by 16% to 2,59,495 t in Jan ’21 as against 3,09,123 t in Dec ’20.
4. Ferro alloys- During the month of Jan ’21 exports were reported at 21,833 t registering a whopping increase by 141% compared to 9,074 t in Dec ’20. Severely dented by the COVID-19 outbreak in early CY ’20 there was a pent-up demand for ferro alloys in the importing countries that has led to increased exports at the beginning this year. While the same spiked by 80% y-o-y basis.
Country-wise exports- In Jan ’21, exports to Netherlands reported a massive increase to 5,948 t contrasted against 1,771 t in Dec ‘20. Other major export destinations were Japan 2,103 (up by 71%), India at 569 t (down 34%), and United States at 8,230 t.
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