SeAH Metal, the unit of the major Korean steel group SeAH Holdings, is going to close its stainless steel wire business by the end of this year due to low competitiveness.
SeAH Metal will fully stop operations of its wire making unit since January 2024, the company representative confirmed to SMR. The main reason for this decision was low competitiveness compared to other wire drawing producers, while the wire capacities of SeAH Metal were not very big – around 10 ktpy. However, SeAH Holdings will not leave the market after the SeAH Metal closure, as SeAH Special Steel also produces stainless steel cold-drawn bars and will keep making it in the future, except for the stainless steel wire business.
Market insiders in South Korea believe imports from China were among the main issues. The whole STS market in the country has been in trouble this year as well, which has already led to the closure of the Hyundai STS plant with a total capacity of 200 ktpy. The most affected segments of the Korean STS market are flats, especially those of the 200 and 300 series. Korean STS CR coils are currently offered at around KRW 3,550/kg (USD 2,710/t) ex-warehouse. In comparison, imported goods can be booked at a price equal to KRW 3,100/kg (USD 2,367/t), which made domestic sales extremely difficult, insiders reported.
However, price competition is not the only reason for closures. “Korean STS consumption fell by 20% from last year,” a Korean market analyst said. The level of stocks at both mills and traders is high. Trading companies prefer to avoid purchases in Q4 amid weak demand, making mills lower output. Thus, market insiders do not exclude more closures are possible in the Korean STS industry in the near future.
Post time: Nov-21-2023
