The Korea Iron & Steel Association (KOSA), a body representing the South Korean steelmakers, has issued a statement over the planned price hikes of the iron ore producers which, it is feared, may prevent the country's economy from rebounding from the global downturn.
"Such a sharp rise in prices shows those producers are abusing their advantageous position in setting prices, without considering prime costs and market circumstances for supply and demand," a KOSA statement quoted by South Korean steelmaker POSCO said. "Raising material prices will automatically lead to a markup of steel products, and ultimately cause prime costs to rise in other major industries such as automobiles and shipbuilding," the statement added.
The organization of local steelmakers made clear its opposition to the raw material producers' attempt to shorten the cycle of price-setting to a quarterly basis, saying the current system of annual pricing is more appropriate.
Regarding the gigantic joint venture proposed by the two Australian miners BHP Billiton and Rio Tinto for their Western Australian assets, KOSA voiced concerns that it could pose challenges for the global iron ore supply market.
KOSA urged the Fair Trade Commission, the South Korean competition watchdog, to start a strict probe into the case.
As SteelOrbis previously reported, the Australian Competition and Consumer Commission (ACCC) and the European Commission are investigating the proposed joint venture.