Domestic sales of steel products in South Korea declined 4.7 percent on-year in the first five months of the year due to prolonged economic uncertainties and weak demand, a trade association said Tuesday.
According to the Korea Iron and Steel Association (KOSA), domestic shipments of steel products amounted to 23.13 million tons in the January-May period.
Experts said a drop in demand from shipbuilders is one of major reasons for decreased domestic sales.
"Steel demand is waning due to economic uncertainties, and the downward trend is likely to continue for the time being," said an official at the association.
Stockpiles of steel products soared 19 percent on-year to 4.52 million tons at the end of May, the association said. But exports of steel products surged 14 percent on-year to 11.28 million tons in the January-May period, it said.
KOSA added that during the first five months of the year, steel production gained 1.2 percent on-year to 41.43 million tons.
Last week, South Korea's central bank sharply cut its 2012 economic growth outlook to 3 percent from its earlier estimate of 3.5 percent as exports are feared to lose steam amid the protracted eurozone debt crisis.
In 2011, Asia's fourth-largest economy grew 3.6 percent.
A slump in domestic sales, meanwhile, is forcing local steelmakers to cut back on output.
Dongkuk Steel Mill Co., the country's third-largest steelmaker, shut down a plant that produces 1 million tons of steel plates annually.
Other steelmakers such as Hyundai Steel Co. are also ratcheting up drives to increase exports to Southeast Asia and other regions to make up for a decline in domestic sales. (Yonhap News)