Seoul: South Korean steelmakers announced Thursday their plan to establish an "item-by-item" export strategy in collaboration with government officials and industry associations as a response to substantial 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, including specific reciprocal duties on around 60 countries, with South Korea facing 26 percent duties. This decision raised concerns among Korean steelmakers already grappling with oversupply and declining prices, fearing that the added tariffs could significantly impact their competitiveness in the U.S. market.
In a recent development, the White House declared that steel and aluminum imports would be exempt from the reciprocal tariffs, providing some relief to the industry. Following this announcement, stock movements were observed: POSCO Holdings experienced a slight dip of 0.37 percent to 271,000 won ($185.12), whereas Hyundai Steel Co. saw an increase of 0.83 percent to 24,300 won, both performing better than the broader Korea Stock Price Index's (KOSPI) 0.76 percent decline.
A Hyundai Steel official emphasized the industry's commitment to working closely with the government and the Korea Iron and Steel Association (KISA) to swiftly address the U.S. tariffs. The strategy involves revising export plans based on product type while continuously monitoring market conditions. POSCO, a leading steelmaker in the country, echoed this approach.
Data regarding steel exports for March is currently being collected, with expectations for its release later this month. This data will help local steel firms refine their export strategies, as mentioned by a KISA official. The official also noted that accumulated export data for the three months through June would provide a clear picture of the impact of Trump's tariffs on local steelmakers' earnings.
In addition to strategy revisions, Hyundai Steel has announced plans to build an integrated steel mill in the U.S., while POSCO is considering investment opportunities for U.S. production facilities. Hyundai Steel aims to invest $5.8 billion in constructing an electric arc furnace-based integrated steel mill in Louisiana by 2029, with production starting the same year.
The companies also plan to develop high-value-added products and enhance technological capabilities to reduce manufacturing costs, thereby strengthening their global market competitiveness.
In a positive trend, the prices of steel products in the U.S. market have increased sharply following the imposition of the 25 percent tariffs. Despite the adjustments, analysts predict that Korean steelmakers will not suffer significant losses in the U.S. market. Kim Jin-beom, an analyst at Sangsangin Securities, highlighted that cold-rolled coil products, typically traded at $600-$700 per ton, have recently surged to $975 a ton.
Korean steel firms have primarily exported hot-rolled coil, cold-roll coil, and steel pipe products to the U.S. under an annual quota system. Previously, under the first Trump administration, Korea benefited from a duty-free quota, which was abolished following the recent imposition of tariffs. In response, Hyundai Steel plans to diversify its product lineup for U.S. customers now that the quota has been lifted.