Korea 2021 steel output set to top 70 mn tons on supercycle

South Korea’s steel output last year was estimated to have topped 70 million tons as the industry enjoyed a steel supercycle for the first time in about ten years.

The country produced 58.7 million tons of steel in the first ten months of 2021, up 5.9% from a year earlier, according to the Korea Iron & Steel Association (KISA). Since the fourth quarter is a usual peak season for steelmakers, the output in 2021 was likely to have exceeded 70 million tons, industry sources said.

Domestic steel output surpassed the 70 million ton mark from 2017 to 2019 but fell to 67.1 million tons in 2020 when the COVID-19 slammed the global economy.

But major industries such as the automobile, shipbuilding and construction sectors revived last year, ramping up steel demand.

SUPPLY SHORTAGE DUE TO CHINA’S LOWER OUTPUT

China, the world’s No. 1 steelmaking country, cut output due to tougher environmental regulations, adding to the global supply shortage when the global inventory was already low due to lower production amid the pandemic.

That created a global supercycle for the steel industry, helping South Korea’s POSCO Co. and Hyundai Steel enjoy record earnings. The world’s No. 6 steelmaker POSCO was estimated to post an operating profit of 9.3 trillion won ($7.8 billion) last year, while smaller rival Hyundai Steel was likely to have earned 2.5 trillion won in operating profit.

South Korea is expected to remain as the world’s sixth-largest steelmaking country, following China, India, Japan, the US and Russia.

Steel outputs of India and Japan were estimated to have risen 20.6% and 17.5% in 2021, respectively, while US production was likely to have grown 19.6%. Russia’s steel output was estimated to have increased 5.7%. Meanwhile, China was estimated to cut production by 0.7%.

Write to Jung-hwan Hwang at jung@hankyung.com
Jongwoo Cheon edited this article.