Rising steel prices affect S. Korean automakers

Rising steel prices affect S. Korean automakers

South Korean steel producers are poised to raise the prices of their products due to the surge in import prices of iron ore. Such a price hike would further add to the woes of a domestic auto industry already suffering the effects of a strong currency. South Korean steel giant POSCO will reportedly increase its cold rolled steel sheet prices 8.6% in April. Other steelmakers will soon follow suit. The increase in steel prices is expected to cost Hyundai Motor Co and its affiliate Kia Motors Corp more than Won 200 billion (around $199.8 million) in additional expenses. The two automakers account for 75% of domestic car production. Although the appreciation of the Won could be dealt with by diversifying export destinations, increased steel prices will undoubtedly affect the production cost of automobiles. The rise in steel prices is expected to force automakers to increase their export prices. Hyundai Motor raised its export prices in January by $50-500. The company is considering a further increase in prices because of the pending steel price hike.