Competitive Power

KOSA warns steelmakers to facilitate 
the protocol for their survival

he Korea Iron and Steel Association held a seminar to mark the 6th Iron Day at POSCO Center in southern Seoul with some 300 people from steel firms and steel consumer firms attending. The occasion also coincided with 30th founding anniversary of the association.
Shim Yoon-soo, vice chairman of KOSA, in his opening speech, said Korea would have to honor the Kyoto protocol as it went into effect last February, although it would be a burden to the industry, which consumes 9.3 percent of total energy consumed in Korea. The steel industry would have to come up with counter measures to cope with the situation because if it doesn't, it would be forced out of the market.
The KOSA vice chairman warned that the world's steel market would be deluged with cheap Chinese steel products as the country has been expanding its steel production capacity rapidly with its steel output jumping to 270 million tons last year from 120 million tons in 2000.
In fact, imports of Chinese steel last year doubled with Chinese steel exports rising 100 percent and up until April of this year, Chinese steel imports tripled, showing that Chinese threat to the steel industry is being realized with small steel firms having a tough time surviving.
Kim Ju-hwan, a senior research staff with the Korea Development Institute, in his presentation entitled, "The Prospect for Future Domestic Supply and Demand for Steel,"said domestic steel demand would increase to 51.56 million tons in 2010 from 47.03 million tons in 2004 and is further expected to rise to 52.66 million tons in 2015.
Steel exports are projected to rise to 14.21 million tons in 2010 with intense competition with Chinese steel expected and with high-quality steel making up most of the shipments. Steel exports are projected to increase to 13.5 million tons in 2015. Steel imports are likely to reach 11.387 million tons in 2010 from 10.238 million tons in 2004 and rise to 12.307 million tons in 2015.
Dr. Kim said the industry would have to look into such matters as expansion, overseas development, and steel imports to manage the imbalance of supply and demand of steel in the country, which would have to be managed in terms of global competitiveness of the domestic steel industry.
Shim Sang-hyung, a research staff with POSCO Management Institute, in his presentation entitled, "The Prospect for Supply and Demand for Steel and Competitiveness of China's Steel Industry," said steel production in China would reach 400 million tons, from 331 million tons this year, adding that steel makers with the annual production capacity of 5 million tons number around 15 as of now, but there would be only four steel makers with the annual production capacity of 20 million tons after 2010 under China's policy to make steel makers larger.
Shim said the Korean steel industry feels that the global steel industry has entered a boom period with the emergence of Chinese steel industry, reviving as a sustainable growth industry profits improving leading to increased facility investment. They, however, pointed out negative factors like rising fuel and raw material costs, uncertain management environment, and increases in variable factors, in addition to growth of Chinese steel industry, challenging rival steel makers and a glut in steel supply around the world.
He warned that the domestic steel industry would have to try to diversify its export market and review its expansion plans aimed at expanding steel exports to China. They also have to draw up plans to protect its domestic steel market in the context of the integration of steel markets in Korea, Japan and China and the marketing plan after integration.

(Left photo) MOCIE Vice Minister Cho Hwan-eik, Lee Ku-taek, chairman of the Korea Iron & Steel Association, Park Tae-joon, honorary chairman of POSCO, pose during a ceremony marking the 6th Iron Day and the 30th founding anniversary of the Korea Iron and Steel Association. POSCO Vice President Yoon Sok-man receives the Industrial Medal Silver Tower from the MOCIE vice minister.

Copyright(c) 2003 Newsworld All rights reserved.
3Fl, 292-47, Shindang 6-dong, Chung-gu, Seoul, Korea 100-456
Tel : 82-2-2235-6114 / Fax : 82-2-2235-0799