POSRI Revises Up South Korean Steel Consumption Estimation in 2010

The steel consumption in South Korea is expected to increase by 15.7% to 52.527 million tonnes in 2010 from 2009, according to POSCO Research Institute. POSRI revised up the estimation by 1.198 million tonnes compared with the level in April. The South Korean economy grows more than expected and the steel shipment is forecasted to increase to automobile and home electronics, according to the institute. However, the domestic demand in 2010 is expected to be lower than the level in 2007 and 2008. Market sources are concerned that capacity expansion could lead to a glut in second half while the home and overseas demand is expected to decrease from first half.

The steel output is expected to increase by 16.0% to 66.03 million tonnes in 2010 from 2009, which is revised up by 1.755 million tonnes compared with the level in April. The output would hit the record of 64.357 million tonnes in 2008. The export estimation is slightly revised up to 22.008 million tonnes from April while the import estimation is revised down by 289,000 tonnes to 8.631 million tonnes due to the increase in domestic output.

POSRI estimates the domestic steel demand increases by 2.6% to 26.044 million tonnes in second half of 2010 from same period of 2009, which decreases by 1.7% from first half of 2009. The export is expected to increase by 0.6% from same period of 2009, which decreases by 0.2% from first half of 2010. The import is expected to decrease by 26.8% to 3.549 million tonnes in second half from same period of last year, which decreases by 30.2% from first half of 2010.