On Thursday, May 14, the world's fourth largest steelmaker, South Korea-based POSCO, said that it would slash prices for all its steel products this week to reflect falls in the cost of raw materials.
Accordingly, POSCO will cut its hot rolled steel prices by 20 percent to KRW 680,000/mt (US$541/mt) and cold rolled steel prices by 16 percent to KRW 785,000/mt (US$625/mt), effective from Friday, May 15.
The company also said it will cut the price for ship plate steel to KRW 820,000/mt (US$652.5/mt) from the current KRW 920,000/mt (US$732/mt).
The steelmaker said that the move would reduce its annual sales by around KRW 2.7 trillion, adding that it would seek to protect profitability through a KRW 1.3 trillion cost-saving program.
Meanwhile, UBS, one of the world's leading financial firms, has said that it expects POSCO to lower steel prices again in the third quarter following the earlier-than-expected price reduction in question.
"We expect another price cut of 8-10 percent in the third quarter with hot rolled coil prices at KRW 640,000/mt, as falling input costs put pressure on steel prices. However, we expect a modest rise in product prices from the fourth quarter as demand recovers," UBS commented.
US$1 = KRW 1,256.77