Seoul: South Korean steelmakers announced plans on Thursday to establish an "item-by-item" export strategy through close coordination with government officials and industry associations to address the significant U.S. tariffs.
According to Yonhap News Agency, U.S. President Donald Trump imposed 25 percent tariffs on steel and aluminum imports in mid-March, alongside country-specific duties affecting around 60 countries, including a 26 percent duty for South Korea. This decision has raised concerns among Korean steel producers, who are already dealing with oversupply and decreasing prices, over their ability to maintain price competitiveness in the U.S. market.
In a recent development, the White House announced that steel and aluminum imports would not face reciprocal tariffs, providing some relief to the industry. However, the response in the stock market was mixed, with POSCO Holdings experiencing a slight decline of 0.09 percent to 271,750 won, while Hyundai Steel Co. saw a rise of 0.62 percent to 24,250 won.
A Hyundai Steel official emphasized the importance of collaboration with the government and the Korea Iron and Steel Association (KISA) to address U.S. tariffs effectively. The official stated that they would revise their export strategies by focusing on individual product types and continuously monitoring market developments. This approach was supported by POSCO, the leading steelmaker in South Korea.
KISA is currently collecting steel export data for March, with plans to release it later this month. This data will be crucial for local steel firms to refine their export strategies. A KISA official noted that the accumulated export data for the quarter ending in June would provide insights into the impact of the tariffs on the earnings of local steelmakers.
In addition to revising their export strategies, Hyundai Steel has announced plans to build an integrated steel mill in the U.S., while POSCO is exploring investment opportunities in "upstream steel processes" within the country. A POSCO representative confirmed that they are considering investment plans for U.S. production facilities.
Hyundai Steel intends to invest US$5.8 billion to construct an electric arc furnace-based integrated steel mill in Louisiana by 2029, targeting production commencement in the same year. The companies also aim to develop high-value-added products and enhance technological capabilities to reduce manufacturing costs, thereby strengthening their global market competitiveness.
Previously, Korea benefited from a duty-free quota under the first Trump administration, which allowed for a yearly import quota of 2.63 million tons, accounting for about 70 percent of Seoul's average export volume from 2015 to 2017. However, this quota was abolished following the imposition of the 25 percent tariffs on all steel and aluminum imports last month.