Korean Steel Industry
- 71st OECD Steel Committee -
6 December 2011
Kim, Sung-Woo/Korea Iron & Steel
Association
Ⅰ. General Economy &
Steel Consuming Industry
Conten
t
Ⅱ. Iron & Steel Industry
1. Crude Steel Production
2. Steel Products Supply and Demand
3. Raw Materials
Ⅲ. Conclusion
I. General Economy & Steel Consuming Industry
 Economy : GDP growth remains strong but likely slows next year
 The Korean economy continues growth, estimating 3.8% range in 2011
 However, in 2012 a slowdown is expected to around 3.5% amid uncertainty
of the global economy
 Steel consuming industry : Keeps a solid activity in 2011 except
construction sector, but weakness is forecast in 2012




Construction : Expected to bottom out in 2012 but very slightly
Automobile : Continues strong so far, but likely to slow in 2012
Shipbuilding : Estimated growth in 2011, but turndown is expected
Machinery/Domestic Appliance : Continue a satisfactory performance
< Steel Consuming Industry>
< General Economy in Korea >
'11 (Estimate)
13.6
'12 (Forecast)
7.2
8.7
6.0
5.4
0.7
Const.
-5.3
4.0
2.2
Auto.
Shipbuild
-5.0 ↓
Machin.
Electro.
II. Iron & Steel Industry
1. Crude Steel Production
 Korea’s crude steel production is estimated 67.4 million tons in 2011,
up 14.4% y-o-y, and in 2012 it is expected 69.2 million tons up 2.7%
thanks to BOF modernization and EAF well-operation
 BOF : 41.7(2011) → 42.0 million tons(2012, 0.7%↑)
 EAF : 25.7(2011) → 27.2 million tons(2012, 5.8%↑)
* EAF share(%) : 46.5(’07) → 43.0(’09) → 42.1(’10) → 38.1(’11) → 39.3(’12)
21.3%
(Thousand tons, %)
14.4%
67.4
2009
69.2
Mil.
58.9
2.7%
48.6
2011 (E)
2012 (F)
58, 912
67, 400
69, 200
-9. 4
21. 3
14. 4
2. 7
27, 667
34, 111
41, 700
42, 000
Y OY
-8. 5
23. 3
22. 2
0. 7
Share
EA F
57. 0
57. 9
61. 9
60. 7
20, 905
24, 801
25, 700
27, 200
-10. 7
18. 6
3. 6
5. 8
43. 0
42. 1
38. 1
39. 3
Share
2010
2011(E) 2012(F)
(전년비)
(Y OY )
B O F
Y OY
-9.4%
2009
Crude Steel 48, 572
2010
2. Steel Products Demand and Supply
 Korea’s total steel demand continues growth but it is expected to
slow in 2012 because steel consuming industry and export are
forecast to weaken in accordance with uncertain global economy
 Domestic Demand : Estimated 56 million tons in 2011 and expected to increase
1.4%(56.8 million tons) in 2012
 Export Demand: Major markets consist of China, Japan and South East Asia. In
2012 the export circumstances are very likely to be weaker
< Export >
< Demand >
58.6
55.2
45.4
52.4
56.8
56.0
20.8
19.1
10.7
'07
'08
6.9
'09
'10
-22.5
21.1
14.5
15.4
6.2
20.5
29.7
28.5
24.9
'11(E)
5.2
1.4
'12(F)
8.6
'07
4.1
-1.2
'08
'09
'10
'11(E)
'12(F)
 Production : Estimated 71.6 million tons in 2011 and expected 73.9
million tons(up 3.1%) in 2012
 Import : Estimated to decrease (8.5%↓) in 2011 because of domestic
output increase. Expected to decrease 4.6%(21.9 million tons) in 2012
< Import >
< Production >
61.7
73.9
71.6
65.9
64.4
26.5
56.9
28.9
20.6
25.1
23.0
21.9
17.9
21.9
9.1
15.9
7.4
'07
8.6
4.3
'08
'09
-11.6
'10
'11(E)
3.1
'12(F)
'07
'08
'09
'10
-28.9
'11(E)
-8.5
-4.6
'12(F)
3. Raw Materials
3-1. Iron Ore and Coking Coal
 Domestic consumption for iron ore and coking coal is estimated to
increase in 2011 due to Hyundai Steel’s blast furnaces operation
 Iron Ore : 54,205(2010) → 66,400 Thousand tons(2011), 22.5%↑
 Coking Coal : 24,477(2010) → 30,570 Thousand tons(2011), 24.9%↑
 Almost dependent upon imports from Australia/Brazil/Canada
 In 2012 consumption will be same as used in 2011
< Iron Ore/Coking Coal Demand>
A U (67.7% )
70
(m il.ton)
60
Iron O re
54.2
48.6
42.4
42.4
44.5
42.7
36,584
30
30.6
20
10
(1,000 ton)
66.4
C oking C oal
50
40
< Import Sources Share(Jan~Oct ’11)>
18.9
19.1
20.6
21.7
24.5
B R (24.9% )
13,441
19.1
C A (24.4% )
Z A (4.3% )
2,344 1,649
0
2005
2006
2007
2008
2009
A U (44.7% )
2010
2011(f)
Iro n O re
9,381
5,518
U S (21% )
4,402 2,091
C o king C o al
3-2. Steel Scrap
 Domestic demand for steel scrap in 2011 is estimated to grow 7.9%
because of EAF operation increase
 30,497(2010) → 32,911 thousand tons(2011), 7.9%↑
 Import dependency is about 26% from U.S. and Japan
 In 2012 demand is expected to rise because of further needs from
construction recovery and POSCO’s mini-mill upgrading
< Steel Scrap Import/Demand >
< Import Sources Share(Jan~Oct ’11)>
(1,000 ton)
Im port
(1,000 to n )
D om estic
8 ,5 0 5
6 ,8 8 4
8 ,0 9 0
7 ,3 1 5
1,601
(22% )
7 ,8 0 0
2,453
(34% )
2 6 ,6 1 1
2 2 ,7 1 6
2 2 ,1 4 5
1 9 ,7 6 4
772
(11% )
2 2 ,8 6 5
US
2,332
(33% )
JA P
RU
O th e r
2007
2008
2009
2010
2011(f)
Ⅲ. Conclusion
 Korean economy has continued growth but is expected to slow in
2012 because of impact by the global economic uncertainty
- Private consumption and facility investment weaken, the manufacturing is fragile
to lose momentum in accordance with the global financial market instability
 Domestic steel production and demand are expected to slow in spite
of a continuing increase in 2012
- Domestic steel consuming industries have done well so far but are expected to
suffer from the continuing threat of the economic recession and appreciation of
Korean currency against the U.S. dollar
 Meanwhile, steel-making raw materials consumption is expected to
increase in 2012
- It is necessary to keep a stabilization of raw materials prices in the long term for
a healthy prosperity of the global steel industry
Thank You