Three major steel companies in South Korea experience declines in operating profits

Three major steel companies in South Korea experienced declines in operating profits in the second quarter of this year. POSCO saw its profits fall by 50.3% y-o-y to 418 billion won (USD 318 million). Hyundai Steel’s profits fell by 78.9% to 98 billion won (USD 74.5 million), and Dongkuk Steel’s profits fell by 23% to 40.5 billion won (USD 30.8 million). The slowdown in construction was the main factor behind these declines.

According to the Korea Iron and Steel Association, South Korea imported 7.883 million tons of steel in the first half of this year, with Chinese steel accounting for about 60%of the total at 4.725 million tons; This represents an increase of 76,000 tons from the previous year. Market experts said that urgent action was needed regarding China’s export strategy.

Chinese steel is priced at USD 863 per ton, significantly lower than the global average of USD 977 per ton. In contrast, Korean steel is much more expensive, costing USD 2,570 per ton. For example, while the domestic price of plates thicker than 6 mm, used in bridge construction or shipbuilding, is around 900,000 won (USD 684) per ton, Chinese steel can be found for 700,000 won (USD 532).