Chinese steelworkers penetrate deeply into Korean steel market

Chinese steelmakers are penetrating deeper and deeper into the Korean steel market, and Korean steelmakers are struggling to cope with rising US protectionism. There is the possibility of cheaper Chinese products expanding their share of the Korean steel market as increased orders from Korean shipbuilders have driven demand for steel plates.

According to the Korea Iron and Steel Association on October 17, imports of heavy plate to the Korean market in September amounted to 149.488 tons, which is a monthly maximum. Korea's thick plate imports remained at less than 100,000 tonnes until February, but has grown steadily since then and has grown by almost 60% since the beginning of the year. The rise in prices for Korean steel plates is one of the reasons for the increase in imports of steel plates to Korea.

The increase in imports of Chinese steel products could have a negative impact on the Korean steel industry, which has many expectations for a welcome recovery in steel plate demand. Korean shipbuilders such as Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering have responded well to orders in the global shipbuilding market ahead of their Chinese counterparts. Demand for steel plates is expected to rise in Korea, but on the contrary, demand will decline in China. China steelmakers facing a downturn in domestic demand for steel plate are likely to seek export opportunities.

Recently, the Chinese government's policy of reducing steel production has shown signs of weakening. Some experts predict that as China faces difficulties over a trade dispute with the United States, it will allow steelmakers to ramp up steel production, shifting their focus from addressing environmental issues to reviving the Chinese economy.

In particular, Korean shipbuilders in a difficult management environment are more likely to choose Chinese over Korean products if Chinese steelmakers are in a price war.