Steel Exports Likely to
Edge up during 2006

Imports are projected to decline 0.7 percent to 18,753,000 tons

Korea's overseas shipment of steel products is projected to grow to 16,857,000 tons this year, up 3.1 percent over 2005 thanks to a focus on exporting high-priced steel products and a rise in supply capacity.
However, the Korea Iron & Steel Association (KISA) is forecasting that the value of exports will fall 0.4 percent to $14.54 billion during 2006.
The domestic steel export industry is in a cycle of decline following the past few booming years, but Korea's steel exports are predicted to increase slightly this year over last year due to her strategy of focusing on higher added-value steel exports and a rising supply capacity, KISA said.
In the short-term perspective, the association said, a weak dollar would not have a severe impact on the domestic steel industry. Korean companies with a higher portion of raw materials outsourcing from foreign countries would benefit from the devaluation of the dollar, whereas those firms which outsource raw materials at home and export finished products would face disadvantages.
If the situation is prolonged for a long-period time, the local steel industry would witness profitability and their edge becoming worse, raising fears that domestic demand of Korean-made steel products would be sluggish and steel export conditions would worsen.
In the meantime, KISA forecast that the local steel industry will see imports decline 0.7 percent to 18,753,000 tons during 2006, rising 6 percent to $12.5 billion on a value basis. Japanese imports are projected to fall where Chinese-made steel imports are predicted to rise, as they did last year.
KISA said Korea exported 16,262,000 tons of steel products during 2005, up 7.8 percent over one year earlier. It is noteworthy that the value of steel exports surged 23.8 percent over a year earlier to $14.6 billion during 2005.
The ratio of sheets and coils to long products was 71.6 percent to 15.7 percent. Sheet and coil products edged up 2.6 percent during 2005, while long product exports surged a relatively higher 31.9 percent. For example, steel reinforcement exports jumped 468.6 percent to 430,000 tons, while beam exports increased 7.2 percent to 1.07 million tons.
By area, most markets, except China and EU, saw steel exports rising.
Steel products to Japan increased 22.7 percent to 2,895,000 tons. More specifically speaking, shipment of cold-rolled sheets, Korea's mainstay export item, surged 32 percent to 871,000 tons, while galvanized steel plain sheet exports climbed up 70.7 percent to 309,000 tons. Steel reinforcement exports soared 152.6 percent to 9,000 tons, the highest level on a year-on-year growth rate.
Steel products to the United States increased 9.2 percent to 1,828,000 tons. Korea exported 198,000 tons of galvanized steel plain steel, one of the mainstay steel exports, to the United States. Steel reinforcement exports to the market chalked up 109.3 percent, the highest, to 6,000 tons.
On the other hand, steel product exports to China shrank 5.9 percent to 4,682,000 tons. Sheet & coil exports to the market declined 7.6 percent during 2005, whereas long product exports soared 15.3 percent. Steel reinforcement exports jumped 88 percent to 92,000 tons, representing the highest growth rate, and wide flange beam exports surged 23.8 percent to 182,000 tons.
During 2005, Korea imported steel products of 18,876,000 tons, up 6.5 percent over 2004. The value of imports soared 30.3 percent to $13.3 billion.
Finished steel product imports increased 9.4 percent to 8,522,000 tons. Hot coils for reprocessing imported during 2005 amounted to 5,336,000 tons, a 6.8 percent increase, while semi-finished imports edged up 1.3 percent to 4,868,000 tons.
By country, imports from Japan, Korea's largest steel importing country, amounted to 7,744,000 tons, representing a 14.3 percent plunge. On the other hand, steel imports surged from China and EU, a 56.4 percent jump to 6,775,000 tons from China and 47.2 percent surge to 752,000 tons. Korea's steel trade with Japan suffered a steel trade shortfall of $3.23 billion or 4,849,000 tons on an amount basis. Korea's steel trade with China registered a deficit of 2,093,000 tons on an amount basis, but achieved a surplus of $870 million on a value basis. nw