South Korean steelmaker Posco is negotiating with shipbuilders for a 65pc price hike of thick steel plates, reported local media. The company’s asking price for thick steel plates is KWR1.15mn/mt ($980/mt), up from KWR700,000/mt in the first half of 2021.
Steelmakers negotiate prices with shipbuilders on a semi-annual basis. Increased costs of iron ore, a major raw material for steel production, raised the input cost of steelmakers.
Iron ore settled at around $160/mt cfr China last week while in May prices had peaked to around $230mt cfr China. But due to the semi-annual terms, steelmakers had to face margin compression. In the second quarter, domestic steel plate price soared to KWR1.2mn/mt.
Local steelmakers and the shipbuilder are soon likely to set prices for steel plates for the second half. Both industries are expected to cooperate to maintain their competitive edge in the international market.