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| TITLE |
Hyundai makes first steel price cuts since February 2006 |
| WRITER |
administrator |
DATE |
2008-11-03 09:04:14 |
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Hyundai makes first steel price cuts since February 2006
November 03, 2008,
South Korea's Hyundai Steel said that it would cut steel prices for the first time in nearly 3 years, signaling a lengthy boom in the steel sector may be over as global credit woes threaten economic growth.
Hyundai Steel said that it would cut prices of rebar and H beam, both widely used in construction, by 9.8% and 8.4% respectively to KRW 921,000 and KRW 1.09 million, starting in November. The move reverses six price increases by Hyundai this year and also marks the first price cut since February 2006.
Hyundai said in a statement that "Although prices of raw materials have fallen steadily in the second half, we have taken a cautious approach to our price policy because a sharp fall in the won currency and unstable market conditions have increased uncertainty. But today's move is based on our assumption that raw material prices would stabilize in the months ahead."
Hyundai earns around 60% of its revenues in South Korea, where the number of unsold new homes has soared to a record 161,000 units and housing prices continue to fall, despite a series of government measures to prop up the sagging property sector.
It may be noted that global steel companies have cut production and some companies are selling below production costs as steel demand from autos to construction has weakened sharply in the second half of this year along with the deepening global financial crisis.
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