The domestic steel sector showed strength on the 28th as it hit the upper limit in succession. With Iran banning steel exports and China also cutting crude steel output, buying appears to have surged on expectations that domestic steelmakers could reap windfall gains.
Moonbae Steel, dhSteel, AJU Steel, and NEXTEEL all hit the upper limit that day.
Bookook Steel (26.18%), TCC Steel (19.70%), and Husteel (17.22%) also rallied sharply. POSCO Holdings, which ranks near the top in market capitalization on the main bourse, jumped 11% to close at 466,500 won.
Britain's Reuters reported that Iran will ban exports of steel slabs and steel plates for the month of May. According to the report, Iran took the measure after its steel industry came under attack amid tensions with the United States and Israel.
China's sharp reduction in crude steel output last month also appears to have affected investor sentiment.
According to the World Steel Association, China's steel output in March this year was 87 million tons, down 6.3% from a year earlier. Cumulative first-quarter output was 247.6 million tons, down 4.6% on-year.
China has said since 2017 that it would cut steel output in consideration of environmental issues such as carbon emissions. By contrast, Korea's steel output in March this year was 5.4 million tons, up 5.4% from a year earlier. Cumulative first-quarter output was 15.8 million tons, up 1.8% on-year.
With imports of Chinese steel declining, domestic steel distribution prices are rising. According to Samsung Securities, hot-rolled import volumes plunged after tariffs were imposed from late September last year on Chinese and Japanese hot-rolled (hot-rolled coil) imports.
From mid-January, when inventory in the distribution market had been largely cleared, domestic hot-rolled distribution prices rose 130,000 won per ton over the following three months, and domestic rebar distribution prices have climbed 180,000 won since December last year.
Kim Yun-sang, an analyst at iM Securities, said, "China's steel slump appears likely to continue for the time being," and noted, "It is worth watching the impact of large-scale price hikes for domestic rebar."