Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Shipbuilders, steelmakers clash over Chinese steel plate imports
Thick steel plates are piled up at Hyundai Steel's Dangjin plant in South Chungcheong Province in this undated photo. Courtesy of Hyundai Steel
By Park Jae-hyuk
Steelmakers reject shipbuilders' request to cut steel plate price
A dispute has escalated between shipbuilders and steelmakers in Korea over the importation of steel plates from China, amid stalled talks over the price of the key material for ships.
Thick steel plates, defined as those over 6 millimeters in thickness, are primarily used in shipbuilding and construction. Typically, Korean shipbuilders and steelmakers establish the price of these plates for the second half of the year before the end of the first six months.
However, they have yet to reach a conclusion, as steelmakers have rejected the shipbuilders' request to lower the steel plate price and are attempting to limit the increased importation of Chinese products.
In July, Hyundai Steel filed anti-dumping complaints with the government against imports of low-priced thick steel plates from China, citing the need to protect the domestic steelmaking industry and stabilize the market price.
Steelmakers also emphasized their deteriorating profits due to the oversupply of Chinese products.
“The steelmaking sector, which is one of the key industries for Korea, has been damaged severely by the influx of excessively low-priced products,” a steelmaking industry official said.
“When shipbuilders faced difficulties and steelmakers enjoyed the industry boom, shipbuilders asked us not to raise the steel plate price. It is now the time for shipbuilders to help steelmakers.”
Shipbuilders have opposed the antidumping complaints, expressing concerns about potential difficulties in using low-priced steel plates to boost profitability.
According to the Korea Offshore & Shipbuilding Association, Chinese products account for around 20 percent of the entire steel plates used by the nation’s top three shipbuilders — HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries and Hanwha Ocean.
Mid-tier shipbuilders, such as HJ Shipbuilding & Construction and K Shipbuilding, have relied more heavily on Chinese steel plates, so potential anti-dumping tariffs may have negative impacts on the shipbuilding sector’s profits.
Shipbuilders also mentioned the falling global iron ore price as the reason for their request to cut the steel plate price.
“The steel plate price is the most important factor for the shipbuilding industry’s competitiveness, as the cost for steel plates accounts for 20 percent of the entire shipbuilding cost,” a shipbuilding industry official said.
“It is necessary to achieve consensus on the steel plate price from a long term perspective, so that the shipbuilding and steelmaking industries, both of which are key industries for Korea, enjoy a win-win situation.”