South Korean steelmakers, including the world’s sixth-largest steelmaker POSCO, are facing a longer-than-expected winter in steel demand as they are grappling with a triple whammy of the global real estate market slowdown, the rising raw material cost and a flood of cheaper steel imports. According to the steel industry on Sunday, the price of hot rolled steel plates, the most widely used steel product, was traded at 910,000 won ($670) per ton as of Oct. 20, falling 8.1% from five months ago. Compared with the price at the beginning of this year, it is 13.3% cheaper. The fall in the price of steel bars has been steeper due to a deepening slump in the construction industry. As of Oct. 20, the wholesale steel bar price hit 850,000 won per ton, down 12.4% from early June and 14.6% from the beginning of the year. The Korean steel industry previously forecast a rebound in steel prices in the second quarter of this year but the longer-than-expected economic slowdown has delayed a recovery in the steel sector, elongating the steel industry winter. Especially, has taken a big toll on steel prices, according to a third-quarter earnings call by POSCO Holdings Inc., the parent of POSCO, last week. “The Chinese real estate market briefly recovered on the government’s stimulus measures but the recovery is slowing down,” the company said, adding that Chinese steelmakers’ output cut has also fallen short of expectations. A day later, another major Korean steelmaker Hyundai Steel Co. also forecast a recovery in steel bar demand in the latter half of 2024, later than the industry’s earlier projection. Korean steelmakers expect steel prices will remain low until the first quarter of next year at the least. Despite the weak steel demand, raw material costs have risen significantly, partly due to labor walkouts in major coking coal-producing countries such as China and India. Steelmakers in India and Southeast Asia have also ramped up steel output. As a result, the iron ore price in the third quarter added $10 per ton from the prior quarter, while the coking coal price jumped $100 per ton over the same period, dragging down steelmakers’ profitability. Korean steelmakers also have to thanks to the weak Japanese currency value. The quality of low-priced Chinese steel products has also improved a lot recently, posing a threat to Korean rivals. Worse yet, steel mills of Korea’s largest steelmaker POSCO could stop operating soon as the company’s labor union is threatening to go on strike for the first time in the company’s 55-year history as part of its collective bargaining this week. POSCO Holdings’ shares ended up 0.4% at 423,000 won on Friday, while Hyundai Steel shares lost 3.1% to close at 31,000 won. Hyung-Kyu Kim at

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