South Korean steelmakers cut HRC prices on slack demand

South Korean steel producers reduced export prices this week on weak sales and lower offers from Asian rivals.

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South Korean steel producers reduced export prices this week on weak sales and lower offers from Asian rivals.

HRC export prices have been cut by $20-30 per tonne to $645-650 per tonne fob for July shipment, according to sources at Korean mils.

“Export prices for HRC have been corrected downwards,” a sales official at Hyundai Steel said.

Korean steelmakers haven’t raised export prices since mid-April, when steel prices generally began falling again.

Hyundai Steel is flexible with its prices and is offering different prices for different destinations, the sales official said.

They now mainly target the Middle Eastern, Southeast Asian and Japanese markets, he added.

Korea’s domestic market is stable, with HRC being traded at 800,000 won ($678) per tonne.

Despite lower prices, South Korean steel mills still want to export more to keep production running, a trader in Seoul said.

A weaker local currency is also helping the export business, he added.

The won was at 1,178 per US dollar on Wednesday, down from 1,110 per US dollar a month ago.

But Korean producers will probably not make big price cuts in coming months due to an imminent increase in iron ore prices.

Australian iron ore miners have requested a 5-10% rise in iron ore prices for third-quarter delivery to South Korean and Japanese producers, a salesman of Hyundai Steel said.

Given such a scenario, Korean steelmakers would rather cut output than reduce prices further if the market does not improve in the near future, he said.

Dongbu Steel has already started trimming production while Hyundai Steel is set to conduct maintenance in either July or August.

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