South Korean steel distribution companies are planning to raise the prices of hot-rolled coil (HRC) by up to KRW 30,000 ($22/t) for September, 2022 to secure profits. After a price hike of KRW 20,000-30,000/t ($15-22/t) in mid-August, the HRC centres are now pushing for another price hike in order to reduce the burden of loss.
However, the purchase price of HRC has not been lowered by domestic steel majors like POSCO and Hyundai Steel and depending upon companies there are variations in sales prices.
Will demand recover?
Prices of HRC imported into South Korea have not shown any marked decline as a result of currency depreciation.
China’s HRC (SS400) export offers were at $630/t CFR for October shipments to South Korea. Furthermore, the order book for HRC has not increased on anticipation of further drop in prices.
However, market participants informed that the possibility of a further drop in prices has reduced amid low inventories with producers. It is unlikely that domestic steel producers will reduce prices further due to the burden of iron ore and coking coal prices.
Therefore, the likelihood of a sharp drop in selling prices of HRC has reduced substantially.
Note: This article has been written in accordance with an article exchange agreement between SteelDaily and SteelMint.
Leave a Reply