- Import costs surge amid elevated offers, weak Korean won
- Demand slows down across construction, appliance sectors
SteelDaily: South Korea’s stainless steel flat products market is entering a “high-cost new normal” phase as elevated offers, combined with a weak Korean won, continue to push import costs sharply higher and increase pressure on downstream demand sectors.
Market participants indicated that July-shipment offers for 304 cold rolled stainless steel into South Korea remained elevated across all major supplying regions. Indonesian-origin offers were heard at around $2,430/t CFR Korea, while Taiwanese and Chinese materials were in the $2,400-2,500/t CFR range.
Industry sources noted that imported 304 CRC costs have now approached KRW 3.6 million/t after factoring in the won-dollar exchange rate, which has remained near the 1,500 level in recent weeks. Market participants expect this elevated import cost base to increasingly become the new benchmark for domestic stainless steel transactions from June onward.
Offer prices into Korea were also heard at a premium compared to broader Asian transaction levels. Market sources estimated regional Asian transaction prices for 304 CRC at around $2,270-2,300/t CFR during the third week of May, indicating Korean import offers were nearly $100-130/t higher.
Demand concerns intensify
Despite attempts by importers and distributors to gradually raise domestic stainless steel prices, market participants highlighted growing resistance from end-users amid prolonged weakness in the construction, home appliance, and manufacturing sectors.
Industry participants also expressed concern that persistently high stainless steel prices could accelerate substitution risks and encourage higher imports of lower-priced finished products, particularly as downstream buyers struggle to absorb rising raw material, freight, energy, and financing costs.
However, suppliers maintained that elevated nickel prices, higher energy costs, currency volatility, and rising interest burdens continue to prevent any meaningful reduction in offer prices.
Outlook
South Korea’s stainless steel market is expected to remain firm in the near term due to sustained high import costs and elevated global stainless steel pricing. However, downstream demand conditions may remain under pressure as higher transaction prices continue to face resistance from construction and consumer durable sectors. Market participants will closely monitor currency movements, nickel prices, and import booking activity for further market direction.
Note: This article is published as part of a content exchange agreement between SteelDaily and BigMint.
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