Considering Increasing Imports from Japan and China
Thick plate supply to shipbuilders is becoming unstable due to the recent typhoon damage of POSCO and the ongoing strike at Hyundai Steel. Korea Shipbuilding & Offshore Engineering, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries are considering increasing procurement from Japan and China.
Immediately after Typhoon Hinnamnor, thick plate supply from POSCO was not regarded as a problem. This is because the market inventory was enough to cover 100 days or so and POSCO’s facilities were expected to be restored within this year. Now, however, the shipbuilders are focusing more on the fact that normal yields are likely to be unavailable for months although production resumption is scheduled for this quarter.
The strike at Hyundai Steel, which accounts for 30 percent of the supply, is adding to their concerns. Although the current scale of the strike is rather small, they cannot but resort to procurement from Japan and China if the strike expands.
Chinese steelmakers are contacting the shipbuilders while suggesting lower prices. “Procurement from China entails additional transport costs and Chinese thick plates are lower in quality than those of POSCO and Hyundai Steel,” one of them said, adding, “We hope they will regroup as soon as possible.”