SEOUL, May 31 (Yonhap) — South Korean steelmakers have raised automotive steel prices for the first time in four years, people familiar with the matter said Monday, a move that could boost their bottomlines.
POSCO, the country’s largest steelmaker, reached a deal with Hyundai Motor Co. and Kia Corp., the country’s two biggest carmakers, to raise the prices of automotive steel by 50,000 won (US$45) per ton, they said.
The companies took the move to pass increased purchasing costs of iron ore onto corporate customers.
Iron ore prices jumped to US$190.51 per ton on May 28 from a year earlier, according to data from the Korea Resources Corp.
Hyundai Steel Co., the second-largest steelmaker, said it has struck a deal with its captive buyers, Hyundai Motor and Kia, over raising automotive steel prices by 50,000 won a ton.
Hyundai Steel earns about 30 percent of its overall sales by selling automotive steel sheets to the carmakers. They are all affiliates of Hyundai Motor Group, the world’s fifth-biggest carmaker by sales.
For the three months that ended March 31, Hyundai Steel posted a net profit of 219.9 billion won, shifting from a net loss of 115.4 billion won a year earlier.
POSCO’s first-quarter net profit more than doubled to 1.13 trillion won from 434.7 billion won during the same period.
Separately, POSCO has reached a deal with the country’s three biggest shipbuilders — Daewoo Shipbuilding & Marine Engineering Co., Korea Shipbuilding & Offshore Engineering Co. and Samsung Heavy Industries Co. — over a price hike in thick steel plates sessential to building ships, a person familiar with the matter said without elaborating.
Korea Shipbuilding & Offshore Engineering manages three shipbuilding units — Hyundai Heavy Industries, Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries.
Hyundai Steel said it plans to hold negotiations with the country’s three biggest shipbuilders — Daewoo Shipbuilding & Marine Engineering Co., Korea Shipbuilding & Offshore Engineering Co. and Samsung Heavy Industries Co. — in the coming weeks over a price hike of thick steel plates.