Demand-supply mismatch admist production cuts in CY’22, might open gates for imports of hot rolled coils, as per a SteelDaily report.
During the eleven month (Jan-Nov) CY’21 the country’s cumulative HRC import volumes were recorded at 3.36 mn t, as per data maintained with SteelMint.
Korea’s leading steel mill, POSCO, has planned to carry out repair works for the 5,500 cubic meter, Gwangyang No. 4 blast furnace for four months in the first half CY’22. “This, in turn, will impact crude steel production by 1.5 million tonnes (mn t), and that HRC products would account for about 1 mn t of the resulting decrease in production,” an industry source added.
Although stocks are usually stockpiled to minimise the production loss due to facility renovation, etc, industry officials say a certain level of reduction in the stocks seems inevitable.
Another leading mill, Hyundai Steel, is also likely to reduce supply of hot-rolled outer plates because of increased plate supplies to automotive players such as Kia Motors and Hyundai.
Finished auto production in CY’21 witnessed a slight downtrend owing to worsening semi-conductor and demand conditions. However, it is expected to jump to 300,000-400,000 units in CY’22. Recovery in downstream industrial demand, particularly from the automobiles and construction industries, is expected and thus, it is highly likely that HR imports will increase.
However, if China continues to cut production and its export policy is centered on high-value added products such as CR sheet materials, it is expected that imports from Japan and India will increase.
In CY’21, Japan’s imports dropped significantly and Chinese imports surged, but it is highly likely opposite will be seen in CY’22.
Industry insiders, on the other hand, feel that China’s production cuts and exports restrictions will be biggest factors that will determine the trend of HR imports next year.
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