|
|
 |
|
Viewing report
|
|
|
|
South Korea Metals Report Q4 2009
Business Monitor International, Sep 2009, Pages: 44
South Korea Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Korea's metals industry
The South Korean steel industry is enjoying a revival in export markets and a modest pick-up in domestic demand, but BMI’s latest South Korea Metals Report warns against complacency, with a likely appreciation of the Korean won posing a threat to the industry’s external competitiveness. In H109, South Korean crude steel output fell 17.2% y-o-y to 22.85mn tonnes, but output in Q2 was up 17.1% over Q1 as the depreciation of the Korean won boosted exports. By mid-2009, the weak won made South Korean steel products 36% cheaper than Japanese production. At the same time, the Chinese government’s stimulus package is boosting Asian demand at a time when inventories are near depletion. As a result, POSCO secured a marked increase in sales in Q2 with exports to China up 66% y-o-y to 926,000 tonnes. Additionally, the domestic market is being lifted, assisted by resumption in orders in the shipping industry, which is lifting demand for heavy sections, as well as the automotive sector, notably Hyundai.
The domestic situation is changing, with BMI’s core scenario improving. In line with improving macroeconomic trends since March 2009, we have decided to revise up South Korea’s real GDP growth forecast from -3.3% to a more modest contraction of -1.9%. This forecast is based on expectations of a better-than-expected outturn in Q209, and a continued, if modest, recovery through H209. One of the key factors underpinning private consumption in H109 was the government’s massive fiscal stimulus, unveiled in a series of special measures from late 2008 to July 2009.
The key question is how much of the additional capacity due to be installed over the next two years will be utilised. BMI’s crude steel production forecast of 46.04mn tonnes in 2009 (down 14% y-o-y) would imply a utilisation rate of just over 74%. We forecast output at 51.55mn tonnes in 2010, with output growing by 12% as the recovery picks up pace. However, this will still mean capacity utilisation sustained at around 74%, well down on the 89% utilisation rate estimated in 2008.
POSCO CEO Chung Joon-Yang voiced his concern that the crisis in the steel industry could last between two to three years, leading to a 30% reduction in output. It will therefore be some years before the South Korean steel industry approaches its full potential, with BMI’s forecasts showing that 2008 output levels will not be exceeded until 2011. Growth will be limited by the maturing of the domestic steel market and the rapid growth in China’s industrial capacity, which has limited steel and steel product export growth, although there is still room for growth. Nevertheless, by 2013 steel exports will by up 16.5% over 2008 levels at 23.4mn tonnes, while domestic finished steel use will rise 1.3% to 59mn tonnes.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
South Korea Metals Report Q4 2010
South Korea Metals Report Q1 2011
South Korea Metals Report Q2 2010
South Korea Metals Report Q1 2012
South Korea Metals Report Q4 2011
South Korea Metals Report Q2 2012
South Korea Metals Report Q1 2010
Japan Metals Report Q4 2009
Austria Metals Report Q1 2011
Turkey Metals Report Q1 2010
|
|
|
|
