S.Korea's Dongkuk cuts steel prices by 11 pct
SEOUL, May 20 (Reuters) - South Korea's third-largest steelmaker Dongkuk Steel (001230.KS) said on Wednesday it had cut prices of steel used for ship plates by 11 percent, its third reduction this year, to match a move by bigger rival POSCO.
Dongkuk said it had decided to cut prices of its ship plates by 100,000 won to 820,000 won ($656.6) a tonne retroactively from last Friday, when POSCO (005490.KS), the world's No.4 steelmaker, unexpectedly slashed its domestic steel prices to compete against cheaper imports. [ID:nSEO318736]
The cuts reflect the increasingly dire state of the global steel industry as stimulus packages meant to revive economic growth have yet to translate into end-user demand, and deep production cuts aimed at draining excess supply have yet to balance the market.
Sitting on a multi-year order backlog, the shipbuilding sector is one of the least affected by the global financial crisis, but new orders have dropped dramatically, a factor pressuring steel prices.
After nearly doubling prices of ship plates to a record 1.41 million won a tonne last year, Dongkuk has since lowered them by 42 percent, reflecting weakening raw material prices and market conditions.
By 0205 GMT, shares of Dongkuk Steel fell 0.9 percent to 34,200 won, lagging a 0.1 percent gain in the broader market .
(Reporting by Miyoung Kim; Editing by Jonathan Hopfner)
