Korea’s steel industry will show signs of recovery from Q4 this year and begin to recover fully from Q1 2010, according to a new forecast compiled by the centre for steel industry study at the Posco Research Institute (Posri).

Korea’s steel business is likely to hit bottom during July-September this year and then slowly turn positive, says one of the authors of the report, Kwang-sook Huh. But watching market conditions very closely this month will be necessary in order to confirm the likely trends, Huh tells Steel Business Briefing.

According to Posri’s Steel forecast of supply and demand from Q2 2009 to Q2 2010 released on 20 April, Korea’s total steel consumption in the first half of this year will decrease by 28% year-on-year to 22.5m tonnes. But by H1 2010, total consumption is predicted to increase by 13% y-o-y to 26m t.

As the global recession has seriously dented steel demand in Korea's auto and home appliance industries, Posri assumes cold rolled coil demand during the current half will fall by 35% y-o-y to 946,000 t. Demand for galvanized sheet also will drop by 26% y-o-y to 1.6m t.

However, by first half 2010 demand for both steel products will have increased by 15% and 8% to 1.1m t and 1.7m t respectively, as Posri expects domestic and export demand for cars and home electronics to increase during next January-June.