The South Korean steel industry may face a difficult period in the second half of the year due to uncertainties in overseas markets and the real estate recession in China.
It is predicted that this situation will put pressure on steel prices and negatively affect the profitability of the sector.
According to a recent report, the rise in China's real interest rates, stagnation in the real estate sector and increased supply will cause steel demand to weaken. Although this situation will cause South Korean steel producers to increase their exports, it will put downward pressure on prices.
While the demand for construction steel materials in the domestic market remains weak, despite the high base load in the automotive industry, upward expectations continue due to the recovery in the global economy as well as the increase in export volume. It is stated that the shipbuilding sector, in particular, has a high potential for stable medium-term demand growth.
Domestic steel prices are expected to increase due to the increase in raw material prices. However, it seems difficult to reflect the full sales prices due to weak demand from sub-sectors and ongoing price competition with Chinese imports.
On the other hand, the situation in the non-ferrous metals sector seems more optimistic. Copper prices are on the rise due to production cuts and increased demand. Precious metals such as gold and silver also continue to attract investor interest.
It is stated that steel prices may continue to decline in the second half of the year, but cost increases may support the profitability of companies to some extent. In addition, it is predicted that the prices of non-ferrous metals such as copper and gold may continue to rise throughout the rest of the year.
The South Korean metal industry is generally going through a period of ups and downs. While uncertainties prevail in the steel sector, an optimistic outlook prevails in non-ferrous metals. Investors and sector stakeholders should closely follow price trends and developments in the sector in the coming period.
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