This file photo shows a POSCO factory in Gwangyang, South Jeolla Province. (Yonhap)
SEOUL, May 31 (Korea Bizwire) — South Korean steelmakers have raised automotive steel prices for the first time in four years, people familiar with the matter said Monday, a move that could boost their bottomlines.
POSCO, the country’s largest steelmaker, reached a deal with Hyundai Motor Co. and Kia Corp., the country’s two biggest carmakers, to raise the prices of automotive steel by 50,000 won (US$45) per ton, they said.
The companies took the move to pass increased purchasing costs of iron ore onto corporate customers.
Iron ore prices jumped to US$190.51 per ton on May 28 from a year earlier, according to data from the Korea Resources Corp.
Hyundai Steel Co., the second-largest steelmaker, said it has struck a deal with its captive buyers, Hyundai Motor and Kia, over raising automotive steel prices by 50,000 won a ton.
Hyundai Steel earns about 30 percent of its overall sales by selling automotive steel sheets to the carmakers. They are all affiliates of Hyundai Motor Group, the world’s fifth-biggest carmaker by sales.
The main gate of Hyundai Steel Co.’s plant in Dangjin, 120 kilometers south of Seoul. (Yonhap)
For the three months that ended March 31, Hyundai Steel posted a net profit of 219.9 billion won, shifting from a net loss of 115.4 billion won a year earlier.
POSCO’s first-quarter net profit more than doubled to 1.13 trillion won from 434.7 billion won during the same period.
Separately, POSCO has reached a deal with the country’s three biggest shipbuilders — Daewoo Shipbuilding & Marine Engineering Co., Korea Shipbuilding & Offshore Engineering Co. and Samsung Heavy Industries Co. — over a price hike in thick steel plates sessential to building ships, a person familiar with the matter said without elaborating.
Korea Shipbuilding & Offshore Engineering manages three shipbuilding units — Hyundai Heavy Industries, Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries.
Hyundai Steel said it plans to hold negotiations with the country’s three biggest shipbuilders — Daewoo Shipbuilding & Marine Engineering Co., Korea Shipbuilding & Offshore Engineering Co. and Samsung Heavy Industries Co. — in the coming weeks over a price hike of thick steel plates.
(Yonhap)
