South Korean producers of cold rolled steel sheets (CRS) have a hard time these days in the domestic market not only due to the weak demand for products, but also due to the large inflow of low-priced Chinese products.
According to industry sources, South Korean producers have been selling their CRS at the prices much lower than their list prices since July but are known to be having difficulty in meeting their sales targets in the third quarter of the year.
At present, major domestic producer POSCO's list prices for its CRS and hot dip galvanized (HDG) steel sheets are staying at KRW 1.18 million/mt ($1,095/mt) and KRW 1.28 million/mt ($1,187/mt) respectively, while the list prices of three other local steelmakers for CRS and HDG are KRW 1.1 million/mt ($1,020 /mt) and KRW 1.2 million/mt ($1,113/mt) respectively.
POSCO is allowing a discount off the list prices to sell its CRS at KRW 1.18 million/mt ($1,095/mt) and its HDG at KRW 1.24 million/mt ($1,150/mt) , whereas three other local producers have cut their list prices for CRS and HDG to KRW 1.1 million/mt ($1,020 /mt) and KRW 1.16 million/mt ($1,076/mt). However, prices for the imported Chinese steel sheets are much lower than the above prices for domestic steel products in the market, attracting a lot of consumers.
To make matters worse, demand for CRS and HDG is quite weak in most consuming industries in South Korea, excluding the automotive sector.