Industries Co. will reportedly more than double purchases of steel plate from
China next year because it can't get enough from suppliers in South Korea
, according to a Bloomberg report
The company will rely on China next year for 21 percent of the 5 mm to 20 mm thick slabs used to make vessel hulls, compared with nine percent in 2006.
Hyundai Heavy Industries Co.
, Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy, are buying more steel to deliver 1,116 vessels on order, valued at a record $90.3 billion. Hyundai Heavy is also buying a $53 million stake in a Chinese steelmaker to guarantee supplies at a lower cost and depend less on its main sources in South Korea and Japan.
Samsung has a preliminary agreement to buy 150,000 tons of the slabs from Shougang Group of China, bringing next year's purchases from the country to 250,000 tons.
Steelmakers have roughly doubled the price of steel plate
since 2003 to about $600 a ton because of increased demand from shipyards and higher costs of iron ore used to make steel products. Posco (PKX)
, South Korea's largest steel company, and other Asian makers of the material are investing to increase output.
Hyundai Heavy will reportedly buy about 700,000 tons of steel plate from China in 2007, 22 percent of its full-year requirement of 3.2 million tons, compared with about 16 percent this year, the company said in September. It also agreed to buy 20 percent of China's Qinguangdao Shouqin Metal Materials Co.
Seoul-based Daewoo Shipbuilding, the world's No. 2 shipbuilder, plans to get about 5 percent of its annual use from China compared
with 3 percent this year. (Source: Bloomberg)