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Dongkuk Steel Circumventing U.S. Import Restrictions via Joint Venture in Brazil
Overcoming Trade Barriers
Dongkuk Steel Circumventing U.S. Import Restrictions via Joint Venture in Brazil
  • By Jung Min-hee
  • July 16, 2018, 10:32
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In this file photo dated on June 10, 2016, Dongkuk Steel vice chairman Chang Sae-wook fire-up the blast furnace to put CSP Steel Plant to go online during a ceremony to celebrate the new steel plant’s operation at the Pecem Industrial Complex in N.E. Brazil where the new steel plant is located.

Dongkuk Steel Brazil is expected to circumvent the protectionist steel trade policy of the U.S. as the U.S. government recently decided to limit steel imports from South Korea for this year to 70% of the average of the past three years and apply a quota of 100% to Brazil.

According to industry sources, the per-ton price of slabs exported from Brazil to the U.S. rose from US$465 to US$576 between December last year and May this year. This is because the price of steel in the U.S. is rising with the U.S. strengthening its import restrictions.

The CSP Steel Mill, Dongkuk Steel’s two-year-old joint venture in Brazil, is currently benefiting from the increase in slab price. Brazil has traditionally been a very important trade partner for the U.S. when it comes to the supply of iron ore and slabs and the U.S. made the decision this time in that regard. At present, the CSP Steel Mill is exporting 10% to 15% of its products to the U.S. The steel mill’s profitability has been improved a lot with the increase in price.

“Steel companies in South Korea are failing to benefit from the current steel price increase in the U.S. as they already shipped a large amount of products before its import restrictions,” said an industry source, adding, “On the other hand, the CSP Steel Mill, which has been rather sluggish since 2016, is currently benefiting from the protectionist trade policy of the U.S.”