South Korea’s hot-rolling companies are concerned whether the supply crunch in domestic and overseas hot rolled products will be resolved by the first quarter of next year. It is highly likely that the supply of domestic hot rolled products will decrease next year and domestic imports of Chinese-made-products are likely to decrease by the first quarter (Q1), SteelMint understands from SteelDaily.
Maintenance works by domestic HR players like POSCO and Hyundai Steel, are scheduled till November.
Most of the Chinese mills of hot rolled products are not offering for November shipments.
Concerns remain over the Chinese government’s policy on production cuts and export restrictions are leading to a decrease in HR exports inflow into Korea.
The offers are expected to resume from January next year, but the imports flow of Chinese hot rolled products will take some time to increase as the Chinese government is likely to restrict the local manufacturers ahead of the Winter Olympics scheduled to be held in February next year.
In addition, POSCO is planning to renovate its No. 4, Gwangyang blast furnace with a volume of 5,500 cubic meters for about 4 months in the first half of next year.
Depending on the repair schedules, the industry predicts that POSCO’s crude steel production would be reduced by more than 1.5 mn t, and hot rolled products would account for about 1 mn t of the reduced production.
According to steel industry officials, it is necessary to increase long-term and stable hot rolled supply given the concerns over the apprehended reduction in imports and domestic production due to POSCO’s renovation of the Gwangyang no. 4 blast furnace.
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