SEOUL, KOREA - The production of thick steel plates, which had been in decline for years due to the slump in the construction and shipbuilding industries, has revived in the second quarter of the year.

 

This is largely because a rise in the demand for shipbuilding orders and offshore plants. Another reason has to do with the preference by overseas thick plate consumers for Korean-made steel products. But analysts said it is too early to tell this is indeed the beginning of a turnaround.

 

The combined output of POSCO and Dongkuk Steel, the two steel makers virtually dominating the thick steel plate market, has turned to a positive growth in the second quarter. THe second-quarter thick plate output of POSCO was 1.44 million tons, up 40,000 tons from the previous quarter, the first increase since the third quarter last year. For Dongkuk Steel, the quarterly output was 500,000 tons, 70,000 tons higher than the previous quarter, the first positive growth since the first quarter last year.

 

According to the Korea Iron & Steel Association, Korea's thick steel plate output peaked at 11.18 million tons in 2011, followed by 10.03 million tons last year. Still, some in the steel industry said it remains to see whether this is really a recovery. A Dongkuk Steel official said, "The second-quarter growth has a lot to do with the 'base effect' by which the second-quarter growth looks better than it really is because of the unusually low performance in the first quarter. We expect the real recovery to come by next year."