S. Korean steel exports to US drop 16% in May on tariffs
South Korea's steel shipments to the United States fell more than 16 percent in May from a year earlier, with export prices down over 9 percent following the imposition of steep US tariffs on steel and aluminum imports.
The US government began imposing a 25 percent tariff on all steel and aluminum imports on March 12 and doubled the rate to 50 percent on June 4.
South Korea's steel exports to the US dropped 16.3 percent to $327 million in May from $390 million a year earlier. Export unit prices declined 9.4 percent to $1,295 per ton from $1,429 over the same period, according to the Korea International Trade Association.
"US steel tariffs appear to have begun affecting Korean steel shipments in May, as domestic steelmakers lowered their export prices last month to maintain a certain level of exports to the US," a KITA official said.
Industry officials expect the higher tariffs will have a greater impact on Korean steelmakers in the second half of the year. The increased rates are likely to make Korean steel products less competitive in the US market and local clients may turn to more price-competitive suppliers, they said.
Worse still, Nippon Steel's acquisition of US Steel is widely expected to further weigh on Korean steel exports to the US beginning next year.
POSCO Group and Hyundai Steel Co., South Korea's two leading steelmakers, have been exploring ways to mitigate the impact of the steep tariffs on their operations.
In March, Hyundai Steel announced plans to invest $5.8 billion to build an integrated, electric arc furnace-based steel mill in Louisiana by 2029, with production scheduled to begin that year. POSCO has decided to invest in Hyundai Steel's US steel mill project. (Yonhap)
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