South Korea: Heavy plate demand from non-shipbuilding sector remains slow in May

South Korea’s heavy plate demand from non-shipbuilding sectors is showing a slow recovery, resulting in a decline in its sales volumes in the secondary market. During end-April 2022, the price of heavy plates in the secondary market had risen to KRW 1.4 million per tonne (t) ($1,099/t), but lack of demand and a decline in import offers have led to a decrease in its prices in the secondary market.

Fall in imported goods prices: Heavy plate import offers from China touched the low levels of $890/t CFR before the Labour Day holidays, despite higher raw materials costs such as iron ore and coking coal. China’s steel export offers continued to decline amidst the Covid outbreak and subsequent lockdowns.

“If local demand instability increases despite the high price of raw materials such as iron ore, the price of heavy plate export offers continues to weaken, leading to a decline in the domestic market price of imported goods,” said a few industry insiders.

Adjustment of domestic prices: Although the domestic demand recovery of heavy plates  for non-shipbuilding sectors is slow, the increase in raw material prices and requirements of shipbuilding might likely support the price levels from the plate manufacturers to a certain extent. However, industry participants cannot rule out the possibility of a downward adjustment in domestic prices.

Demand recovery: The need for shipbuilding equipment is expected to continue, but due to challenges in getting required strength of labourers, the potential of volume expansion in the short term is very low. It is anticipated that heavy plate prices will be at their highs and the wait-and-see attitude among non-shipbuilding segments is considered as a burden in the short term.

Moreover, the rising economic uncertainty due to surging Covid-19 cases while the cost burden for non-shipboard businesses remains high, might keep demand and prices of heavy plates impacted.

Note: This article has been published in accordance with an article exchange agreement between SteelDaily and SteelMint.