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Color steel

Color coated steel shines in style on Samsung, LG home appliances

By May 09, 2021 (Gmt+09:00)

Dongkuk Steel employees inspect color steel plates at the Busan plant.
Dongkuk Steel employees inspect color steel plates at the Busan plant.

At Dongkuk Steel Mill Co.’s main plant in Busan, some 430 km southeast of Seoul, huge rollers churning out colorful sheets never stop except when they are under repair and maintenance.

Eight production lines at the factory have been running to full capacity since late last year. Nevertheless, Dongkuk barely meets orders from home appliance giants such as Samsung Electronics Co. and LG Electronics Inc.

“Sales contracts of our products are fully booked to the end of the first half,” said an official at the plant in Gammandong in the southern part of the port city.

“We’re several weeks behind in orders despite our entire production line being in full operation.”

Color coated steel plates are in increasing demand from a variety of business sectors ranging from home electronics companies to construction firms and even chipmakers, as consumers have become more self-assertive and want to have their daily goods in style.

The COVID-19 pandemic ushered in the notion of the "at-home economy," in which increased time spent at home has prompted consumers to invest more in home appliances, such as TVs, refrigerators and washing machines, driving up demand for color steel plates.

The strong demand, in turn, is pushing up profits at Korea’s three main players of such specialty products – Dongkuk Steel, KG Dongbu Steel Co. and POSCO Coated & Color Steel Co.

ANTIBACTERIAL COLOR PLATES AT COVID CLINICS

According to the Korea Iron & Steel Association, the domestic output of color steel plates reached 543,645 tons in the first quarter, up 8.2% from the year-earlier period.

Since the finish of color coated steel recreates the texture of wood grain, the smoothness of marble and the roughness of granite with a wide spectrum of patterns on it, the end products are hard to identify as steel based on appearance alone.

Color steel plates used in furniture design.
Color steel plates used in furniture design.

One of the key clients of color steel plates is Samsung, Korea’s top appliance maker, which lures consumers with its so-called bespoke high-end products.

LG is also using color plates widely in its premium goods under the Objet Collection brand.

With the growing popularity of color steel plates, steelmakers are even producing antibacterial color products for use in the operating rooms at hospitals and coronavirus clinics these days.

In the 2.4 million ton a year Korean market, Dongkuk Steel is at the forefront of the color steel plate industry with its market share of 35%, followed by KG Dongbu (25%) and POSCO (20%).

PROFITS STRENGTHENED BY COLOR STEEL

In 2020, the global steel industry underwent an unprecedented slump with demand from the shipbuilding and automobile industries plummeting.

Korean steelmakers, however, eked out decent profits helped by the growing demand for color steel plates, which have higher margins than general steel products.

Dongkuk Steel dazzled the market in 2020 with its highest operating profit in a decade.

The company is expected to post 74.6 billion won ($66.6 million) in operating profit on sales of 1.37 trillion won in the first quarter of this year, up 31.8% and 11.9%, respectively, from the year-earlier period.

The steelmaker expects its operating profit to hit a record this year.

Color steel plates
Color steel plates

POSCO Coated & Color Steel’s first-quarter profit is forecast at 14.4 billion won, close to its full 2020 profit of 16.9 billion won

KG Dongbu, which reported a threefold increase in its 2020 operating profit to 110.7 billion won, is expected to post above the year-earlier profit of 28.6 billion won.

To meet rising demand, the companies are expanding their facilities.

Dongkuk Steel has invested 25 billion won to build an additional production line for color steel plates with an annual production capacity of 100,000 tons. The plant is scheduled for operation in July.

KG Dongbu is set to complete a production line with an annual capacity of 100,000 tons at its Dangjin plant by the first half of this year.

According to research firm Global Info Research, the global color steel plate market is expected to climb from 24 trillion won in 2019 to 33 trillion won in 2024.

Write to Kyung-Min Kang at Kkm1026@hankyung.com

In-Soo Nam edited this article.

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