S. Korean CR distributors focus on purchases of second-grade products

Tuesday, 23 August 2011 15:54:18 (GMT+3)   |  
       

South Korean distributors of cold rolled steel sheets and coated flat steel products are concentrating on the purchase of second-grade products through secondary distributors.

This is a phenomenon that has appeared amid distributors' growing dissatisfaction with the steelmakers' online auction sites where steelmakers have recently reduced transaction volumes to a large extent. The steelmakers have reduced their shipment volumes of their cold rolled steel sheets and electrolytic galvanized steel sheets with thickness in a range of 0.6-0.8 mm, in which distributors have strong interest, since last month, causing the distributors' competition to conclude purchases to wane.

In addition, steelmakers' new strict restrictions imposed on distributors' participation in the online auctions have become one of the reasons causing distributors lose their interest in the auctions. In the case of POSCO's auction site, those who fail to make payment in cash within three days after their successful bidding become unable to participate in any auction for one week thereafter.

Distributors are saying that even though they understand the steelmakers' position in the auction where a large number of secondary distributors are participating, it is more convenient for them to buy second-grade products in the ordinary market. A lot of the distributors are saying that, if they secure a large volume of second-grade products in the market, it will help them to increase their share in the market for regular products to a certain degree.


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