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Hyundai Steel Company (004020.KS)

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    Eric
    Hyundai Steel, Dongkuk Steel, and Daehan Steel review rebar expansion all at once
    Asian Economy 2021.12.19 06:00

    Hyundai Steel to increase production of new rebar at Incheon plant
    YK Steel moves up its factory to Dangjin from 850,000 tons to 1 million tons ↑
    Entry of new operators due to booming rebar market
    Expansion review to protect the market share of existing rebar producers

    Hyundai Steel, Dongkuk Steel, and Daehan Steel, which have the top three domestic rebar market shares, are all considering rebar expansion. This is because competition for market share has intensified as new operators such as Korean special Steel enter the market amid a boom in the rebar market next year.

    According to the industry on the 15th, Hyundai Steel is reviewing the expansion of rebar by forming a TFT for upgrading the electric furnace at the Incheon plant. Hyundai Steel is the No. 1 company in the domestic rebar market, with an annual production capacity of 3.35 million tons.

    Dongkuk Steel, the second-largest steel company, is considering a new rebar expansion, and is said to be approaching it cautiously. This is because, if domestic steelmakers are fully operational, the supply of rebar will be 14 million tons, slightly exceeding the domestic demand for rebar (10-12 million tons). Daehan Steel, which took over YK Steel, is considering rebar expansion while moving its YK Steel plant from Busan to Dangjin. The industry expects that YK Steel's annual rebar production will increase from the current 850,000 tons per year to 1 million tons.

    Currently, the domestic rebar market is dominated by three companies: Hyundai Steel (#13, 3.35 million tons), Dongkuk Steel (#2, 2.75 million tons), and Daehan Steel (#3, 2.4 million tons). As of last year, domestic rebar production stood at 9.47 million tons, with three companies producing 93% of the total. The reason they started expanding all at once is that the structure of the rebar market is fluctuating.

    Domestic demand for rebar was 8-9 million tons per year, but it has risen to 10 million tons due to an increase in demand such as the real estate market after Corona 19. Demand is expected to increase next year compared to this year.

    In the midst of this, the entry of new operators into the rebar market seems to have had a significant impact. Korea Special Steel began construction of a new rolling line in February and will produce 700,000-800,000 tons of rebar per year from April next year. It is known that Dongbu Steel has a will to enter the rebar market. An official from the steel industry said, "As the two companies that had not been in the rebar business aggressively enter the market, the three rebar suppliers have no choice but to expand their facilities to maintain their market share." "The current situation in the rebar market has changed."

    Source : https://koreastockinfo.com