South Korean Government Sets Up Rebar and Plate Supply

South Korean government announced on Wednesday the government starts out stable supply of material or major steel products such as rebar or plate. The government makes accommodation loan at total 620 billion won to a company. Domestic 10 electric furnace makers such as Hyundai Steel, Dongkook Steel stockpile ferrous scrap on a conjoint basis, which establish joint company. South Korean crude steel is 51.64 million tonnes in 2007, which is 19.03 million tonnes by electric furnace. Crude steel rate by electric furnace is higher than other country. Domestic consumption volume of ferrous scrap is 28.69 million tonnes in 2007, according to South Korean iron & steel association. Ferrous scrap generation volume is 15.93 million tonnes in 2007. Ferrous scrap import volume is 6.92 million tonnes. South Korea depends on import for ferrous scrap. Ferrous scrap import volume is increasing with increasing electric furnace construction. Short supply of ferrous scrap is likely to continue until 2010. South Korea must import ferrous scrap at over 7 million tonnes per year due to ferrous scrap shortage in whole world. Hyundai Steel, Biggest electric furnace maker in South Korea, purchases it from Russia, USA or Japan stably by long term contracts. Domestic ferrous scrap market price is significantly increasing due to short supply or rising iron ore price. South Korean makers’ purchase price of ferrous scrap is increasing to near 700,000 won per tonne at the ended of June from the ended of 2007 at about 300,000 won. Import ferrous scrap price is over US$ 700 per tonne. Consequently, electric furnace makers’ profit is changing for the worse rapidly. The government will supply rebar and plate of major steel products stably.