Korean shipbuilders to increase Chinese steel imports

Korean shipbuilding companies are planning to increase steel imports from China to tackle a worsening shortage of steel sheets and a boost in orders, sources said yesterday.

Korean shipbuilders have until now depended on local steel and imports from Japan.

Korean shipbuilders considering more Chinese imports include the three largest domestic companies - Hyundai Heavy Industries Co., Samsung Heavy Industries Co., and Daewoo Shipbuilding & Marine Engineering Co.

Korean shipbuilding companies are expected to need a total of five million tons of steel sheets, two million of which will come from leading local steel producer POSCO. Another 1.2 million tons will come from Dongkuk Steel Mill Co.

Hyundai Heavy Industries is planning to increase Chinese imports next year to supply 15 percent of its total needs, up from between 7 to 8 percent this year.

"We have an absolute lack of steel because supply from Korean and Japanese industries is limited while shipbuilding orders are on the rise. We will actively seek more imports from China," said an official of Hyundai Heavy.

Moreover, Hyundai Heavy is reportedly considering a way to invest in Chinese steel companies to secure a stable supply of steel.

Samsung Heavy will also expand its Chinese steel imports as it projects its demand for steel sheets to increase to 1.1 million tons next year from 1 million this year.

"In the past, Chinese steel materials were branded as low quality products, so local shipbuilders were reluctant to import them. But recently, the quality of products from major Chinese steel companies are evaluated as not so far behind Korean or Japanese," an industry source said.

(yoonmi@heraldm.com)



By Kim Yoon-mi