Coping with Trade Pressure
SeAH Steel Corporation is planning to deal with trade pressure from the United States by utilizing its manufacturing facilities in the US.
The corporation’s total shipments to the US were approximately 500,000 tons last year, with oil country tubular goods (OCTG) estimated to account for more than half of the shipments. This year’s quota for OCTG exports to the U.S. is 120,000 tons. The company is planning to avoid a decrease in sales by utilizing SeAH Steel USA (SSUSA), which has a maximum annual production capacity of 150,000 tons.
The current capacity utilization of SSUSA is around 30%, but it is expected to rise to at least 70% late this year. “It was predicted that there would be some hurdles on the raw material supply side due to a steep increase in local raw material price, but things have been properly addressed,” said SeAH Steel Vice Chairman Lee Hui-ryeong, adding, “The capacity utilization can be raised in the near future.”
The company’s another major export item is line pipes. The steelmaker is having a hard time finding a breakthrough when it comes to this item. Line pipes accounted for 40% or so of the company’s total exports to the U.S. last year and its quota for this year is likely to be 100,000 tons, about half of last year’s exports. SSUSA does not produce line pipes. Although the local price of the item is showing a year-on-year increase of more than 15%, the positive factor is likely to be offset by the additional tariff of 14% recently imposed on the company.