South Korea’s car industry predicts growth in steel demand after Canada trade deal
An official at the Korea Automobile Manufacturers Association (KAMA) told Steel First the trade agreement struck between Canada and South Korea on Tuesday March 11 could increase demand for Korean steel.
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The official, who worked on the free-trade agreement between the two countries, explained that there were currently “no fixed plans” to create Korean car plants in Canada and that any increased demand for Korean cars in Canada arising from the deal would probably not be met by the two Korean-owned plants in the USA (in Georgia and Alabama).
“These two production facilities may cover the [growing] demand in the USA,” he said, “but they are not [large] enough to support supplies of vehicles to Canada.” As a result, for the time being at least, an increase in Canadian demand would be largely satisfied by increases in exports of vehicles made in South Korea.
The official said he expected an increase in Canadian sales to increase South Korean automotive production, and that this would boost its purchase of South Korean steel.
“Korean auto makers use steel made by Korean iron and steel companies,” he said. “I don’t think they will use raw material from other countries because they are expanding Korean steel mills so they have enough capacity to [allow more vehicles to be made] in Korea.”
However, he admitted the South Korean steel sector might not be able to meet this demand in the future, prompting steel imports, but “it will depend on the demand of automobile sales domestically and abroad”.