South Korean steelmaker POSCO's steel service centers (SSCs) for cold rolled steel sheets (CR) are witnessing an ongoing drop in their supply of CR to local automakers Hyundai Motor and Kia Motors. Their overall supply of CR to these automakers has continued to decrease since the beginning of 2000, and such a trend is expected to continue further for some time.
Compared with the beginning of 2000, their CR supply volume has decreased by 30-50 percent. Particularly, unlike the past when their supply of high-grade steel sheets decreased significantly, it is a recent trend that the supply of ordinary-grade steel products has also dropped, severely harming some SSCs.
At present, there are seven POSCO SSCs supplying CR to Hyundai Motor and Kia Motors. These are Shilla Steel, Dongmyung Steel, Geumgang Steel, Daechang Steel, Bookook Steel, Changhwa Steel and Geumchang Steel. In the case of only three SSCs, their supply of CR to the two automakers accounts for more that 40 percent of their entire CR supply to local automakers, reflecting that the SSCs' supply of CR to Hyundai Motor and Kia Motors is declining further as time goes by.
Under such circumstances, POSCO's CR steel service centers do not believe that their CR supply to these two carmakers is vital to their survival. However, it seems necessary for them to work out some measures to save themselves, as the CR supply to the automakers used to form a large part of their sales. In this connection, some POSCO's CR SSCs are sounding out the possibility of supplying their products to other large consumers like the makers of welding rods and cable trays as well.