Sales completion for cold-drawn steel bars among South Korean steelmakers is expected to become severer in the fourth quarter of the current year in their domestic market.
This is because that Youngheung Iron & Steel, Dongil Steel, Manho Rope & Wire and Chungwoo Rope have recently finished their facility investments and are conducting test runs of their new facilities, following SeAH Special Steel and Dongbu Special Steel, and furthermore, there is a large gap between the leading companies and the newcomers as regards selling prices in the market.
According to distributors, the overall atmosphere of the distribution market for cold-drawn bars is very quiet these days. If the market conditions were normal, the steel product stores in Moonrae-dong in Seoul and in Siheung would have constantly been full of buyers.
However, with 29 medium-sized construction companies under court receivership in South Korea, a prolonged slump of construction activities has much weakened the demand for bolts in market. "Sales of anchor bolts dropped more than 40 percent in July and August compared with the same period last year, and therefore, a lot of distributors are engaging in dumping sales," said a distributor of bolts.
The distribution market prices for cold-drawn bars in the Gyeonggi-Incheon area exist in two price ranges, according to the materials used for the products. SeAH Special Steel, Dongbu Special Steel, Daeho P&C and Dongbang Metal, which use wire rods produced by POSCO or POSCO Specialty Steel in producing their cold-drawn bars, are supplying their products to primary distributors at the price of KRW 1.31 million/mt ($1,216/mt) on average, while primary distributors are selling them at prices in a range of KRW 1.44-1.45 milliom/mt ($1,336-1,346/mt). Meanwhile, cold-drawn bars produced by newcomers in the market that mainly use imported materials are selling at prices in a range of KRW 980,000-1,000,000/mt ($909-928/mt) in the market.