Steelmakers try to raise prices to reflect costsKorean steelmakers are raising the prices of their products to reflect increased costs of raw materials, industry sources said Monday, though the price hikes are likely to be lower than expected.
Posco, Korea’s largest steelmaker, recently agreed with a local carmaker to raise the prices of its automobile steel sheets, according to the sources. It is the first time since 2017 that Posco has done so.
Posco also increased the prices of its cold rolled steel, picked oiled steel and galvanized steel in recent months.
“We can’t confirm the deal with our customer, but it’s true that the company has been trying to raise the prices of our products due to increased raw material costs,” a Posco spokesperson said.
The price of iron ore jumped from $72.63 per ton in January to $124.05 in July - a more than 70 percent increase - before decreasing again.
This hike in raw materials ate into steelmakers’ bottom lines in the first half of the year.
Posco saw its operating profit drop 15.3 percent on year to 1.5 trillion won ($1.2 billion) in the first half, while No. 2 player Hyundai Steel posted an operating profit of 445 billion won, down 33.5 percent from a year ago.
Japan’s Nippon Steel recently inked a deal with Toyota Motor to raise the price of steel sheet for automobiles, and industry insiders have said local steelmakers are in talks with their customers to raise steel prices.
“We are still negotiating with our customers over automobile sheets prices,” a Hyundai Steel spokesperson said. “If Posco and others have raised their product prices, then it will serve as a good reason for us to push for a price hike.”
Korea’s major steelmakers are also pushing to raise the prices of steel products used in the shipbuilding industry, though negotiations have not been easy.
Local shipbuilders have been demanding a freeze in prices of thick steel plates.
More in Industry
Soaring iron ore prices batter Korea's steelmakers
BTS among performers at Lotte Duty Free 40th anniversary concert
[TEST DRIVE] New Chevrolet Colorado can handle anything Korea throws at it
Tada tries again with new taxi ride-hailing service
Kia plant hit with infections for second time this month