Pressed by an increase in scrap metal prices and a decline in productivity, major Korean steelmakers have decided to raise the price of steel bars.
The move was expected to face much industry resistance as it comes amid sluggish market conditions.
Hyundai Steel and Dongkuk Steel, the nation’s second and third-largest steel companies respectively, are to raise the unit price per ton from the current 720,000 won ($645) to 740,000 won, officials said Friday.
|Hyundai Steel’s plant in South Chungcheong Province|
Put together, the two steel manufacturers form about half of the domestic steel bar market, according to the Korea Iron & Steel Association.
“The price increase is in fact quite inevitable as we long reached our limits, with the steady price decrease of steel products,” said an official of Hyundai Steel.
Also, the government’s recent electricity saving campaigns have dented general productivity, which eventually led to the price increase, he added.
The new price is expected to take effect within the month, though final details are still under discussion, according to officials.
The country’s top steelmaker POSCO, however, appeared to be more cautious about raising prices.
“Though we recently increased the purchasing price of scrap metal, this does not mean that we are to immediately raise the market price of our steel products,” said an official of POSCO.
The largest obstacle for the steelmakers is the backlash from their key consumers, especially the domestic construction industry, which has steadily been demanding for price reduction on steel bars and other metal-based raw materials.
By Bae Hyun-jung (firstname.lastname@example.org)