South Korea: POSCO’s February stainless steel price hike looms as cost pressures intensify

• Nickel surge sharpens cost pressure
• Import risk to shape pricing decision

SteelDaily: POSCO is widely expected to announce a stainless steel (STS) price hike for February, after keeping prices unchanged in January to stabilise the domestic market. Rising raw material costs and currency headwinds have now strengthened the case for an upward revision, with market expectations clustering around increases of KRW 100,000, KRW 200,000, or as high as $300,000/t.

Cost inflation has accelerated sharply over the past month. LME nickel prices have jumped by around $2,880 m-o-m, while the Korean won has remained weak above 1,450 per dollar. Together, these factors have lifted the production cost of 304-grade stainless steel, which contains roughly 8% nickel, by an estimated KRW 330,000-335,000/t. Industry participants note that this alone provides POSCO with sufficient justification to raise prices by at least KRW 300,000  to protect margins.

Pricing scenarios under debate

Market views, however, remain split. One camp argues that a full pass-through of cost inflation is necessary, pointing not only to higher nickel and forex costs but also to the opportunity loss from January’s shipment freeze. Under this scenario, POSCO could implement a KRW 300,000 hike in February, followed by a smaller adjustment of around KRW 100,000 in March if costs remain elevated.

A second, more moderate view sees a KRW 200,000 increase as a balance between margin protection and market stability. This approach would partially absorb costs while limiting downstream resistance, especially amid cautious demand conditions.

The most conservative scenario advocates a KRW 100,000 increase, aimed at defending domestic market share against imports. Proponents of this “speed control” strategy argue that a smaller hike would help curb inflows of cheaper material and allow for further adjustments in March once demand visibility improves.

Outlook

With nickel prices volatile and exchange rates still unfavourable, cost-side pressure is unlikely to ease in the near term. POSCO’s February pricing decision will therefore be closely watched as a benchmark for the wider Asian stainless steel market, setting the tone for mill pricing strategies and import competitiveness in the weeks ahead.

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