Sudden rise in the price of steel
As the steel companies increased the price of products, the construction companies strongly rebelled.
The construction companies said that the jump in the steel prices caused the increase in the sales prices of the apartment. Accordingly, they requested a preliminary discussion before the steel companies increased the price of the steel products. However, the steel companies firmly said NO and then interrupted a supply of the products to partial construction companies.
▽Continuous jump in the steel price 〓 As the price in the international steels largely increased, the domestic steel companies raised the price of various steel products or increased the price through reducing the price discount applied temporarily from the fourth quarter of 2000 (October ~ December).
POSCO raised the price of plate by 5.6% and the price of stainless steel sheet by 7.3% in April, and then raised the price of Hot rolled sheet to KRW 330,000 per ton by KRW 20,000 last year.
POSCO will decide to raise the price of Hot rolled sheet additionally in July after watching a trend of international steel price and a status of the domestic supply & demand.
Such as Dongbu Steel and Union Steel, CR (Cold Roll) enterprises raised the price of CR sheet to KRW 409,000 from KRW 389,000 per ton in April. Then they decided to raise its price to KRW 450,000 by increase of 10% on July.
Such as INI Steel and Dongkuk Steel, the Electric muffle furnace companies raised the steel price per ton to KRW 335,000 from KRW 315,000 in February. They raised the price by KRW 10,000 at the end of the last year.
▽Rebellion of the construction enterprises 〓Steel companies insists we had to increase the steel price because the international steel price was sharply increased and the price of scrap iron has continuously been increased. It cant be helped.
However, the construction companies which have used a reinforcement to construct the apartments, strongly rebelled The analysis showed that the price of scrap was raised, but an exchange rate of Korean Won-US Dollar decreased. So, the steel companies dont have many things on their hands. In addition, they said that the steel companies seemed to confer together on the price of the products.
Steel is the product which causes the increase of a Cement Ready Mixed Concrete. When the price of reinforcing rod increases by KRW 10,000 and the price of Ready Mixed Concrete is raised by 5%, the construction companies have additionally a charge from KRW 3 billion to KRW 10 billion said the construction companies. It causes the increase of a selling price of the apartment.
We want the preliminary discussion before determining the increase in prices a materials association requested the preliminary discussion by sending an official document to steel companies.
However, steel companies discontinued to supply products to Byucksan Engineering & Construction and Ssangyong Engineering & Construction for 10 days.
Steel companies plan to raise the price of products even in the second half of the year. Accordingly, troubles will be arisen between steel-demanding companies and steel companies.
Chi-Young Shin higgledy@donga.com
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