Korea Steel Demand Expected To Grow 2.9% In 2023

May 22, 2023

Recently, the World Iron and Steel Association released the latest version of the short-term (2023-2024) steel demand forecast report. The report shows that South Korean steel demand is expected to grow by 2.9% in 2023.
It is understood that in 2022, Korea's steel demand will shrink significantly due to factors such as reduced investment in infrastructure construction in South Korea, lower construction industry activity rates, and floods in Posco's steel plants.
Since the beginning of this year, the performance of the Korean steel industry has rebounded. According to FnGuide (a financial information company in South Korea), in the first quarter of this year, Posco's operating profit may reach 584.3 billion won (about 400 million U.S. dollars), and Hyundai Steel's operating profit may reach 264.2 billion won ( About 200 million U.S. dollars), Dongguk Steel's operating profit may reach 113.4 billion won (about 85 million U.S. dollars).

Although the performance of the above three companies is not satisfactory compared with the same period last year, the Korean steel industry generally believes that considering the impact of the global economic recession and the base effect brought about by the global spread of the epidemic last year, this should be regarded as good start.
It is reported that affected by the epidemic in the first quarter of last year, the demand for automobiles, home appliances, and construction in South Korea expanded, and the corresponding demand for steel also increased. At the same time, the price of iron ore has risen sharply, and the price of steel products has also risen accordingly, and the business situation has improved. Taking POSCO as an example, its operating profit in the first quarter of last year was 2.3 trillion won (about 1.7 billion U.S. dollars), a year-on-year increase of 43.9%. The Korean steel industry believes that considering the rare good performance of the steel industry in the first quarter of last year, the reference value of comparing it with the first quarter of this year is limited.

The South Korean steel industry is looking forward to a recovery in performance after the second quarter, and is optimistic about China's role in it. A researcher at Hyundai Motor Securities said: "In the second half of this year, the Korean market is expecting an increase in China's steel demand, and China's real estate development prosperity index has also increased month-on-month for three consecutive months."
In addition, the second quarter is the peak consumption season for the steel market, and its performance is expected to improve. A person in the Korean steel industry said: "In the second quarter, the prices of raw materials such as iron ore will remain at a relatively high level, and steel prices will rise strongly. Coupled with the impact of Turkey's post-earthquake reconstruction project and China's economic recovery, the steel exports of South Korean steel companies are expected to increase in the second half of this year. "

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