- AD measures on imported steel become counterproductive
- Policy measures required to phase excess rebar capacity
Japan Metal Daily: South Korea’s steel demand remains sluggish. In 2025, apparent steel consumption will decrease by 4.2 mnt y-o-y to 43.6 mnt, marking a low level below the 43.7 mnt recorded in 2002. In domestic demand, the slump in building materials has persisted for a long time, and anti-dumping measures on imported steel have seen a counterproductive effect with Chinese-made thick plates.
“The semiconductor industry is booming, but there is almost no benefit for the steel industry,” an executive at a Korean steel manufacturer said. In the Korea Composite Stock Price Index (KOSPI), which is at its highest, Samsung Electronics and SK Hynix account for 40% of the market capitalisation, showing a severe semiconductor bias. In AI-related fields, although the steel industry also has some benefits such as steel frame use in data centre construction, the general sentiment remains lukewarm.
Structural decline in demand
Condominium construction in Seoul and surrounding areas, which once drove demand for building materials, has cooled due to speculative purchases under the Lee Jae-myung administration. In response to the structural decline in demand for rebars, Hyundai Steel began restructuring its production. The 90-t electric furnace and small rebar rolling mill at the Incheon Plant will be closed, and the Pohang Plant, which has operated a combined line for rebar and special steel bars, will move special steel production to the Karatsu Steelworks and focus on rebar production.
The South Korean government is also promoting structural adjustments through policy measures to address excess steel rebar production capacity. However, many Korean electric furnace manufacturers are owner-based, and the production restructuring following Hyundai Steel’s approach has not materialised.
Plate prices depressed
There are also many pending issues regarding steel plates. In terms of thick plates, global shipbuilding demand has expanded and major companies such as HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean have secured orders through 2029, leading to active construction. However, importing cheap thick plates from China has made it difficult for Korean steel manufacturers to raise thick plate prices.
Since last November, the South Korean government has imposed an AD tax of 27.91~34.1% on Chinese-made thick plates, and in some cases, a minimum price is promised to exceed $600/t. As a result, imports of Chinese timber for thick plates other than shipbuilding decreased, but major shipbuilders who can use bonded measures for re-export products can avoid AD tax.
Furthermore, Chinese companies signed annual contracts to secure shipbuilding volumes, and since negotiations had been made before the Iran war in February, the sunken price remains at just over $500.
Currency depreciation
For hot-rolled coils, the KRW 50,000 price hikes announced by POSCO and Hyundai Steel at the beginning of the year have gained some traction, but currently, the 1 dollar = 1,500 won range marks the lowest won depreciation since 2009. This offset price increases in the dollar denomination, and import prices from China are in the low-$500 range, lagging behind other Asian markets.
The AD measures for Japanese and Chinese hot coils have also become more effective, as bonded measures by major re-rollers and steel pipe manufacturers have become established, and the plaintiff, Hyundai Steel, has not achieved the expected effectiveness. Additionally, although there is a price difference between Japanese and Chinese companies, the price agreement reached with the Korean government at around $550 seems to be a level that falls short in the current international market.
In 2025, Japan exported 1.26 mnt of hot coils including alloy steel and 730,000 t of thick plates to South Korea. These are all long-term transactions, making them sensitive to domestic market conditions and trade policy trends in South Korea.
South Korea’s domestic steel demand reached a record high of 58.57 mnt in 2008, followed by 57.08 mnt in 2016. Crude steel production in 2016 was 68.6 mnt, but in 2025, crude steel production dropped by 13.5 mnt to 61.9 mnt, with a reduction of only 6.7 mnt. Under the Trump administration, steel exports to the US have become difficult, and future trends in South Korea’s steel production and exports are expected to be a major factor in the Asian market.
Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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