The government is increasingly likely to impose a tariff on Chinese hot-rolled plates (thick steel plates with a thickness of 6mm or more), leading to a surge in steel stock prices. Until now, low-priced Chinese products had flooded the market, causing domestic hot-rolled plate prices to decline, but this situation may improve.
Dongkuk Steel Mill shares were traded at 9,660 won in the KOSPI market at 9:14 a.m. on the 21st. The stock price rose 12.46% (1,070 won) from the previous day. During early trading, the stock price even jumped to 10,350 won.
At the same time, Hyundai Steel's stock price also rose 5.87% (1,500 won), and POSCO Holdings' stock price increased by 4.1% (11,000 won). Many investors seem to expect benefits from the tariff on Chinese hot-rolled plates for steel companies that produce hot-rolled plates.
The Ministry of Trade, Industry and Energy's trade committee made a preliminary ruling to impose anti-dumping tariffs of 27.91% to 38.02% on Chinese hot-rolled plates the previous day. The tariff will be applied once the Ministry of Strategy and Finance confirms the preliminary ruling. The market expects tariffs to be introduced around mid-year.
In the last year, the domestic import volume of Chinese hot-rolled plates was 1.19 million tons (t), accounting for 17.6% of the total domestic production and import volume. Additionally, Chinese hot-rolled plates were around $130 cheaper per ton than domestic hot-rolled plates, thus lowering domestic hot-rolled plate prices.
Forecasts suggest that prices for hot-rolled plates used in shipyards, as well as in construction and infrastructure, may also rise due to the tariff measures. Lim Ji-young, a researcher at Samsung Securities, noted, "It is reasonable to expect an increase in non-shipbuilding hot-rolled plate prices due to the rising import prices of Chinese hot-rolled plates," and added, "Assuming that prices for non-shipbuilding hot-rolled plates rise by half of the average preliminary ruling tariff of 33%, the annual operating profit of POSCO Holdings and Hyundai Steel can be expected to increase by 13% and 31%, respectively."