- KRW-dollar volatility raises costs for stainless steel importers
- Year-end inventory adjustments weigh on active purchasing
SteelDaily: South Korea’s stainless steel (STS) market remained under pressure in the third week of December, as demand weakened sharply ahead of the year-end. Foreign exchange volatility curbed demand for imports, even though exporters offered competitive prices. Market participants noted that demand had hit a bottom, with aggressive discounting emerging as traders attempted to boost turnover amid slowing consumption.
Price analysis
On the pricing front, galvanised (GS) material prices were at levels close to imported material, with selling prices fluctuating narrowly amid the market downturn. Genuine 304 cold-rolled stainless steel was traded in the range of KRW 3.3-3.35 million/tonne (t), although there was volatility at the lower end of the range. GS material showed a similar trend.
Imported stainless steel prices held at KRW 2.9-2.95 million/t, while GS cold-rolled stainless steel was estimated at KRW 2.95-3.0 million/t. In China, prices of 304 cold-rolled stainless steel from Tisco in the Wuxi region remained unchanged w-o-w at around CNY 13,400/t.
Asian prices of 304 stainless steel were assessed at $1,780-1,850/t CIF, broadly stable compared with the previous week. However, actual transaction volumes across the region remained limited due to sluggish demand and the seasonal year-end slowdown.
Market scenario
Volatility in the KRW-dollar exchange rate continued to weigh heavily on importers, increasing financial burdens and prompting widespread discount sales. As a result, competition among exporters intensified, keeping prices on a downward trajectory.
According to distributor sources, China’s Tisco reduced its February offers this week. Order volumes for 300-series stainless steel remained limited, except for select sizes and grades. In contrast, contract activity was relatively stronger for 400-series stainless steel, despite cautious buying preferences.
With POSCO’s January shipment prices expected to remain largely unchanged, some market participants are increasingly favouring domestically produced material or spot market purchases over new import contracts. Exchange rate uncertainty and concerns over future price volatility have dampened interest in fresh import bookings.
Meanwhile, sentiment across the broader steel market weakened further following a rise in defaults among construction-related steel companies in the carbon steel distribution segment. Year-end inventory adjustments muted active purchasing, although some transactions were heard, limited to value-added rate requirements. Overall, industry participants broadly described current business conditions as challenging.
Regarding China’s recently introduced stainless steel export licensing system, which has drawn considerable market attention, mills have yet to reflect the policy in concrete price hikes. Industry sources indicated that while the measure could support prices next year, the likelihood of a short-term market rebound remains limited.
Note: This article has been published in accordance with a content exchange agreement between SteelDaily and BigMint.
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