South Korea Metals Report

Published 02 December 2014

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South Korea Metals Report

BMI View:   South Korean metals consumption growth is set to moderate in 2015 , as the country's exports of manufactured goods are hit by a global economic slowdown and an expected contraction in Europe . South Korea is a major producer of steel and slab zinc, but domestic mining output of ferrous and nonferrous metals is small and reliant on imports for the raw materials required by the metals industry. Domestically produced metals and metal products are fundamental to the country's industrial base, as well as trade.

South Korea has very small reserves of copper and the production level of both mined and refined copper is insufficient to meet domestic demand. The country has to rely on imports to supplement domestic production, and is the world's sixth largest importer of refined copper and the world's fifth largest importer of copper blisters and anodes, which are unrefined forms of copper.

Moderating Growth
South Korea - Metals Consumption Growth

Below-Consensus Views Bearish For Production

Our views on the Chinese economy are below consensus, and we foresee a significant impact on South Korea's export sectors, as China is South Korea's largest export market, with a 25% share of total exports. Inflationary pressure is mounting in the Chinese economy and we expect to further tightening measures, which would likely exacerbate weaknesses in the country's housing market. Given that the property sector has been the main engine of growth for the entire mainland economy, a correction would inevitably hurt Chinese demand for South Korean metal goods.

Two of South Korea's other sizeable export markets, Hong Kong (5.4% of total exports) and Taiwan (3.2%), are very dependent on the Chinese economy, meaning demand from these two may face similar downward pressure. The slowdown in China is also leading to overcapacity, with Chinese metal products flooding the Asian market. Indeed, we remain below consensus across base metals based on our China view. As we do not...

Table of Contents

BMI Industry View
7
SWOT
9
Metals SWOT
9
Industry Forecast
10
Steel
10
Steady Growth Outlook
10
Table: South Korea - Steel Production & Consumption ('000 tonnes, unless stated otherwise)
14
Table: South Korea - Steel Production & Consumption ('000 tonnes, unless stated otherwise)
14
Copper
15
Stagnant Growth Prompts Aggressive Efforts To Secure Overseas Supplies
15
Table: South Korea - Refined Copper Production & Consumption
17
Zinc
17
Slowing Chinese Imports To Weigh On Sector
17
Table: South Korea - Zinc Production, Consumption & Balance, 2009 - 2017 (kt)
19
Commodities Forecast
20
Commodity Strategy - Monthly Metals Update
20
Iron Ore
21
Steel
23
Aluminium
24
Copper
25
Lead
26
Nickel
27
Tin
28
Zinc
29
Table: Select Commodities - Performance And BMI Forecasts
29
Table: BMI Commodity Strategy Table
30
Steel Price Forecast
30
Table: BMI Steel Forecast
30
Table: Steel Forecast
37
Competitive Landscape
38
Table: Selected Companies & Indexes Financial Data
39
Company Profile
40
POSCO
40
Table: POSCO - Financial Results
45
Korea Zinc
46
Table: Korea Zinc - Financial Results
49
Methodology
50
Risk/Reward Ratings Methodology
50
Table: Mining Business Environment Indicators
51
Table: Weighting Of Components
52

The South Korea Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in South Korea.

BMI's South Korea Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in South Korea.

Key Benefits

  • Benchmark BMI's independent metals industry forecasts for South Korea to test other views - a key input for successful budgeting and strategic business planning in the South Korea metals market.
  • Target business opportunities and risks in South Korea through our reviews of latest industry trends, regulatory changes and major projects and investments.
  • Exploit the latest competitive intelligence and company profiles on your competitors and peers.

Coverage

BMI Industry View

A comprehensive summary of the impact and implications of the latest regulatory developments and key forecast indicators covering metals production, consumption and upside/downside risks to our outlook. The Metals SWOT analysis outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.

Industry Forecast

Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:

  • Steel: Steel production & consumption (‘000 tonnes).
  • Aluminium: Aluminium consumption production & balance (‘000 tonnes).
  • Copper: Refined copper production & consumption (‘000 tonnes).
  • Zinc: Refined zinc production & consumption (‘000 tonnes).
  • Lead: Refined Lead production, consumption & balance (‘000 tonnes).
  • Nickel: Refined nickel production & consumption (‘000 tonnes).
  • Tin: Refined tin production, consumption & balance (‘000 tonnes).

Regulatory Development

Details of the industry regulatory framework, relevant key legislation and environmental standards that impact the metals industry. The regulatory developments section provides analysis of the overall regulatory burden, the tax regime (including income tax rates), bureaucratic framework, corruption and a country specific political overview. Details of the industry regulatory framework provide information on relevant key legislation and regulations that will impact the metals industry.

Commodities Forecast

Provides in depth coverage and forecasting of steel prices and includes BMI’s core view of what to expect in upcoming months. Within the monthly metals update, BMI provides performance data and key forecasts for select commodities, including prices for aluminium, copper, gold, iron ore, lead, nickel, palladium, platinum, silver, steel (MEPS Carbon Steel), tin and zinc.

Competitive landscape

The competitive landscape section provides comparative company analyses of detailed financial data for key listed metals firms, ranked in order of market cap (USDmn).

Company Profiles*

Examines the competitive position and short to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects. Details of products and services provide a full overview of each company’s operations.

Sources

The Metals Reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc