Jeongsoo Choi: Korean steel market likely to be better in H2

Asian Metal: Good morning, Mr. Choi, I am very honoured to invite you to join the interview. Many of our customers are interested in Korean steel market, thanks for accepting the interview to share your opinions here. Well, could you please introduce your company briefly?

Choi: Ok. Since 1980, Daebun Steel has engaged in steel business. Daebun Steel located in the center of Noksan Industrial Complex in Busan and supplies quality steel products to shipbuilders, tradesmen, builders, engineers, and home handymen. Our company can provide many steel products, such as angle, section, flat bar, solid bar, pipe & tube, sheet & plate, channel, universal beam and so on.

Asian Metal: Yeah, do you purchase these steel products from some big steel mills in Korea, like Posco?

Choi: Yes. We are trader not producer. Our suppliers include Korea Steel Shapes co., Ltd., Hyundai Steel, Dongkuk Steel Mill Co., Ltd..

Asian Metal: I got it. You noted that you have the business of steel plate. What kind of steel plate do you provide and what is the sales price now?

Choi: We mainly provide plate with the specification of SS400 and the thickness is from 5mm to 200mm. The price of SS400 14-20mm is about KRW700,000/t (USD630/t), including the 10% tax.

Asian Metal: Ok. Would you like to tell us the Korean steel market situation in H1?

Choi: Well, actually, the steel market was terrible in H1. Steel prices dropped a lot, demand was weak and traders struggled a lot.

Asian Metal: Yeah, Chinese steel market was also terrible in the first half of this year. Prices decreased for more than four months and the markdown was over RMB500/t for many products. Many traders suffered big losses. In your opinion, will the Korean steel market make some progress in H2?

Choi: I think the market will be better in the second half of this year because demand is going to be stronger. There are some opportunities. The fabrication industry is likely to make some progress. Actually, the shipbuilding industry has more orders in hand.

Asian Metal: Though opportunities are many, challenges also exist. In your opinion, what will be the biggest challenge for your business in H2?

Choi: In the second half of this year, not only for my company but also for Korea steel manufacture, the biggest challenge is more and more competitions. Mainly, the competition is from overseas markets. And our main competitors are from China and Japan. There are many steel makers in these countries, especially in China. The advantage for Chinese steel manufacture is low cost. And Japanese companies, they enjoy lower Yen.

Asian Metal: Ok. As the general manager, would you like to share us your short-term and long-term plans of the company development?

Choi: In the short-term period, we need to promote our competitiveness in price, in quality and in services. Actually our long-term plan is to reduce cost and earn more profit. The profit is little now, if we do not cut cost, it is hard for us to survive in the steel industry. We need to find the way to cut cost.

Asian Metal: Will you consider to develop the export and import business in the near future?

Choi: We focus on the domestic market at this moment. Actually, if we can find some suppliers, who can provide high quantity products with lower price, we would be very happy to import from other countries. The export business is harder and harder now. Korea has been facing more and more challenges. On one hand, for some Asian markets, like Vietnam, Malaysia, Thailand and Indonesia, we have to compete with Chinese steel providers. On the other hand, Korea steel products are facing anti-dumping investigations from the United States, Australia and even Brazil. For example, Australia launched anti-dumping investigations on Korean steel plate and the United States did that on pipes for oil industry. So the export situation is harder.

Asian Metal: Absolutely agree. Well, thank you for your time. And, thanks again for taking the interview and we wish you a successful work and flourishing business in the future!