Hyundai Heavy may cut China steel-plate imports

Hyundai Heavy Industries (009540.SEO), the world’s largest consumer of steel plate, may cut back purchases from China for the first time in five years, Bloomberg reported. Management said it will build fewer vessels in the near future and is also considering redirecting its purchases to a new Korean mill. "It’s not like Chinese steel plates are cheaper than those from Korea or Japan," said Hyundai Heavy Chief Operating Officer Kang Chang June. New furnaces built by Korean plate producers Posco and Dongkuk Steel Mill (001230.SEO) are expected to boost Korean production capacity by 37%, but overall usage of steel plate may decline due to a drop in ship orders. Last year Hyundai Heavy and its affiliates used nearly 25% less steel plate than originally projected. The increased production combined with continued damp demand for steel plates are expected to squeeze the margins of Chinese mills, which are also expanding.