POSCO plans to continue with its strategy of flexible pricing for its hot-rolled (HR) products in Jan’22, keeping the rates similar to that in Dec’21 in order to reduce the pressure on end-users. At the same time, price corrections similar to those seen in Dec’21 are expected in Jan’22 , including for steel pipes, considering the decline in both import and market prices.
Reasons for flexi-pricing
- The import offers from China have been significantly lowered.
- Although the export offers of Chinese HR products has not been officially announced, it is known that some Chinese steel makers are offering at as low as $800/tonne (t), so the gap with domestic products has widened significantly.
It is difficult to say for how long such low offers will be maintained because mills in China will have to prioritise domestic demand ahead of the Winter Olympics.
In Korea, particularly, in a situation where domestic supply is expected to be limited, considering the renovation of POSCO’s Gwangyang No. 4 blast furnace and the resulting hot-rolling facility repair plan, there is concern that there may be shortfall in domestic supply.
However, the pressure of supply of hot rolled products owing to facility repairs or reduced imports may not be as high as expected because currently POSCO is in a position to keep its domestic supply stable through 1) an adjustment in its repair schedule timing 2) reducing exports.
~Inputs by SteelDaily
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