Subscribe
E-Paper
By Park Jae-hyuk
Korean steelmakers have begun suspending their exports to the United States, following the Donald Trump administration's recent decision to impose a 25 percent tariff on steel imports to the country.
Dongkuk Steel Mill, one of the nation's top three steelmakers, said Friday it will stop shipments to the U.S. from next month, taking a wait-and-see attitude toward negotiations between Seoul and Washington over a possible exemption.
"We will expand exports to Europe and Southeast Asia, so as to minimize losses," Dongkuk Steel Vice Chairman Chang Sae-wook told reporters before the company's regular shareholders' meeting at its head office in Seoul the same day.
"We cannot afford to cover the costs from the 25 percent tariff that the U.S. government will impose on steel imports. We will be able to resume U.S. exports, if we finish discussions about the issue with our clients there."
Even before the recent announcement from Washington, Dongkuk Steel had reportedly considered halting exports to the U.S. and increasing shipments to other countries, if the Trump administration decided to impose heavy tariffs.
The company has focused on producing galvanized steel sheets, exporting products worth 130 billion won ($121 million) last year.
The U.S. government has already imposed 8.75 percent anti-dumping tariffs on steel sheets, so an additional 25 percent would harm the company's price competitiveness.
Dongkuk Steel's exports to the U.S. account for only 4 percent of its total sales, similar to that of POSCO and Hyundai Steel.
Industry officials expect the U.S. tariff offensive will deal a heavier blow to mid-size steelmakers such as Husteel, Nexteel and SeAH Steel.
Husteel, which relies on U.S. exports for about half of its total sales, reportedly stopped running a production line for these earlier this month.
The measure was taken because the company could not ship products to the country before the date of the imposition of tariffs next week.
The company produces steel products for both domestic and overseas markets at six production lines at its factory in Dangjin, South Chungcheong Province.
Husteel has annually produced oil pipes worth 100 billion won.
"Our clients will decline to buy Korean steel after the imposition of tariffs," Husteel President Park Hoon said during a meeting with government officials last week. "Selling our products in Southeast Asia is harder than we expected, and demand from Canada is much less than the U.S."
Nexteel has pushed ahead with building a factory in the U.S., but industry officials are skeptical about the steelmaker's financial ability. SeAH Steel plans to raise its U.S. factory's capacity ratio.
The U.S. represents 80 percent and 20 percent of their total sales, respectively.
POSCO and Hyundai Steel are considering sharing the tariff costs with their clients, according to industry officials.
