Global steel market to remain strong: POSCO

POSCO, the world's fourth-largest steel maker, said it expected global steel markets would remain strong through next year backed by buoyant demand from shipbuilding and steady economic growth.
Stainless steel businesses, which have struggled with weak nickel prices, will revive in October as the nickel market has already hit a bottom, POSCO's Chief Financial Officer told Reuters in an interview late on Sunday. Customers have delayed ordering steel, anticipating drops in the price of nickel, a key input in steel-making.
"Fundamentals in global steel markets are stronger than we expected as worries about a supply glut in China have eased and demand for steel, particularly from the shipbuilding sector is strong," said Lee Dong-hee. "I believe that the trends will continue until next year."
Reflecting the strong demand for steel, shares in POSCO South Korea's second-largest firm with a market value of $56.5 billion, hit a record high of 614,000 won on Friday before ending 612,000 won, up 3.9 percent. Shares in POSCO almost doubled so far this year. South Korean steel makers have raised prices for some products amid booming global demand.
Markets expect POSCO to raise steel plate prices soon as local shipbuilders struggle to secure steel for ships amid booming orders. POSCO has maintained steel plate prices since April. Lee declined to comment about a possible price hike. In India Lee expected POSCO's $12 billion steel mill project to get back on track soon.
POSCO's proposed steel complex in Orissa, which would be India's largest foreign direct investment project, has run into trouble after residents protested state plans to buy their land for the plant. "India is the market we cannot give up," he said.
Lee said customers had delayed orders for stainless steel, anticipating prices would fall due to tumbling nickel prices, a key input in the alloy, but the situation would change soon. "This is all about sentiment. Demand for stainless steel will come back around next month as nickel prices already hit the bottom."
Global nickel prices have almost halved since hitting an all-time high of $51,800 per tonne in May due to concerns that higher prices would cut demand. The metal soared 140 percent last year alone.
Nickel accounts for about 60 percent of the cost of making the popular 300-grade of stainless steel. The firm has cut its stainless steel output since July and lowered stainless steel prices four times so far this year.