South Korean producers of stainless steel wire are turning their backs on domestic wire rods due to a widening price gap between domestic materials and imported products.
According to stainless wire industry officials, the import prices for foreign 300 series stainless steel wire rods are lower than the market prices for domestic production stainless steel wire rods, with a price gap of $300-600/mt. Thus, a large number of local stainless steel wire makers are decreasing their use of domestic wire rods and increasing their purchases of imported products.
At present, the import prices for foreign stainless steel wire have become similar to the South Korean market prices for domestic production stainless steel wire rods. Thus, South Korean stainless steel wire producers prefer the foreign wire rods imported at low prices in an attempt to survive in a price war for sales.
"We have no other way but to increase the imports of foreign wire rods, because the price gap between the domestic wire rods and imported ones is so wide even though there is no great difference between them in terms of product quality," said an official at a local stainless steel wire producer.
According to data from the Korea International Trade Association, South Korea's aggregate imports of stainless steel wire rods in the first half of the year increased by 25.7 percent to 17,426 mt compared with the same period last year.