Steel service centers (SSCs) in South Korean have difficulty in controlling their growing inventories of galva-annealed steel sheets for use in the automotive industry.
Such a phenomenon is severe particularly in the case of major domestic steelmaker POSCO's SSCs that supply galva-annealed steel sheets to Hyundai Motor and Kia Motors. One SSC is known to have steel sheets in stock to maintain supplies for the next three months until October, and is currently under heavy financial pressure.
The demand and supply of galva-annealed steel sheets in the domestic market was well-balanced and SSCs had no problems controling their inventories in the first quarter of this year, but the situation at SSCs changed in April, when Hyundai Motor and Kia Motors began increasing their imports of the products in question from Japan which suffered a supply glut of automotive steel sheets in the wake of the massive earthquake in March that hit the Japanese automotive industry hard.