Clouds Loom Over Future Export Outlook
"New Markets Must Be Secured"
Last month, South Korea's steel exports to the United States fell by more than 20% compared to the same period last year. This decline is seen as a direct result of the U.S. imposing a 50% tariff on specific steel and aluminum products, a measure that took effect on June 4 (local time). Industry insiders and observers note that, given the tariff rate remains at 50% following recent U.S.-Korea trade negotiations, South Korea's steel exports to the U.S. are expected to contract further in the second half of the year.
According to the Korea Iron and Steel Association on August 6, South Korea exported 188,439 tons of steel to the U.S. last month, a 21.6% decrease from 240,072 tons during the same period last year. This marks the first time this year that monthly exports to the U.S. have fallen below 200,000 tons, and the lowest level since September last year, when exports totaled 188,639 tons.
This year, monthly steel exports to the U.S. were 210,000 tons in January, 230,000 tons in February, 240,000 tons in March, 230,000 tons in April, 240,000 tons in May, and 240,000 tons in June, showing no clear downward trend even after the tariffs were imposed. In fact, last month?when the U.S. raised tariffs on imported steel to 50%?exports increased by 13.7% year-on-year. This is attributed to the steel industry's practice of placing orders several months in advance, which meant the effects of the U.S. tariffs were limited until last month. However, starting this month, the impact of the tariffs has begun to be fully reflected in export figures.
Industry experts believe that the decision to maintain the 50% tariff on Korean steel in recent tariff negotiations will place even greater pressure on future exports to the U.S. Not only does this further erode the price competitiveness of Korean steel, but it also increases the likelihood that U.S. buyers will seek alternative suppliers to replace Korean products.
In particular, the outlook for Korean steel exports to the U.S. is further clouded by the expected impact of Nippon Steel's acquisition of U.S. Steel, which is set to take full effect next year. South Korea's top two steelmakers, POSCO and Hyundai Steel, are planning to build integrated steelworks in Louisiana, but commercial production is not scheduled to begin until 2029. As a result, Japanese steel, which will soon have a local production base in the U.S., is expected to gain a competitive edge over Korean steel in terms of price and supply chain advantages in the American market.
Lee Jaeyoon, a research fellow at the Korea Institute for Industrial Economics and Trade, said, "With the tariff remaining at 50%, it is highly likely that U.S. domestic steel production will accelerate. The overall volume of U.S. steel imports is likely to decrease, and Korean steelmakers will inevitably need to find new export markets or shift their focus to domestic sales."
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