Korea Steel Use to Rise by 22% in 2010, POSRI

Steel consumption in South Korea is expected to increase by 22.0% to 55.378 million tonnes in 2010 from 2009, which increases for the first time in 2 years, according to POSCO Research Institute. POSRI revised up the consumption forecast by 2.85 million tonnes compared with the former outlook in July when automobile production and shipbuilding would top the record high. While the steel demand below the highest in 2008, the steel production would mark the record. The import including semi-finished products would be higher than the export in 2010. However, the export would exceed the import in 2011 for the first time in 10 years when the steel makers increase the production capacity and domestic demand growth slows.

POSRI revised up South Korean automobile production forecast in 2010 by 305,000 units to 4.142 million units, which tops the record high in 2007, compared with the former outlook in July and the ship completion forecast by 4.1 million gross tons to 31.6 million tons, which records 30 million tons for the first time. The construction investment estimation was revised down by 4 trillion won.

The steel demand in 2011 is expected to increase by only 0.9% from 2010, according to POSRI. While the increase in construction investment, the automobile production and ship completion decreases.

The export was expected to exceed the import in 2010 at the earliest due to the capacity increase including the start of Hyundai Steel’s blast furnace.