The FTC said workers from Hyundai Steel, Dongkuk Steel, Korea Iron & Steel, Daehan Steel, Hwanyoung Steel and YK Steel had organized meetings at cafes and restaurants in Seoul and communicated over the phone for about 20 months to reduce sales discounts.
There were 12 discounts affected, which were later applied via direct sales to major builders or through distributors to smaller builders and end-users. This occurred between May 2015 and December 2016.
In May 2015, the discount was limited to 80,000 won so that prices would not fall below 520,000 won. The following month, the discount was reduced by 20,000 won to 60,000 won so that prices would not fall below 540,000 won.
In comparison, Chinese rebar export prices were over $100 per tonne lower. Chinese export prices fell to $320-325 per tonne fob China on June 29 from $350-360 per tonne fob China on May 4, according to Metal Bulletin data.
Producers have been under pressure after rebar prices failed to recover due to cheaper alternative supply from China and falling ferrous scrap prices, which is a key raw material for electric-arc furnace (EAF)-based producers in South Korea, the FTC said.
South Korea produced 11.39 million tonnes of rebar in 2017, averaging 838,000-1.02 million tonnes per month, according to Worldsteel data.
90% of domestic rebar produced is used in the local civil engineering and construction markets because of the high logistics costs involved with export cargoes. The six producers account for 81.5% of the South Korean market, the FTC said.
South Korea’s Fair Trade Commission has fined six rebar producers 119.4 billion won ($105.7 million) for price rigging.