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CCTV Finance "Tianxia Finance" is now starting to pick up in the construction and manufacturing industries of many countries, and the demand for steel is increasing. South Korea has also ushered in the peak season for construction sites. However, due to the severe shortage of steel bars, the main building materials, many construction projects have been postponed or suspended.

Liu Zheng, Special Correspondent of Caijing Channel: I am now in Daegu City, located in the southeastern part of South Korea, which is near Zhutian Station of Subway Line 2. With the completion of a large number of residential buildings in the surrounding area in recent years, people's travel demand has increased. Starting in September 2018, Zhutian Station has begun to expand and add exits.

The construction site is surrounded by the iron fence in the distance. Almost all four corners of the intersection are like this. Because this is a busy road section, the local people have long expected that the road will be unblocked after the completion of the project this month. However, due to the shortage of steel bars, the current This project has been postponed to September this year.

According to statistics, in the past two months, 59 construction projects in South Korea have been interrupted due to insufficient supply of major building materials such as steel bars. Many of them are government-led public construction projects.

After the COVID-19 outbreak last year, South Korean construction demand shrank, and major steel companies reduced production. Entering this year, as the construction industry has recovered faster than expected, the demand for steel bars has surged. According to statistics, the current national steel rebar inventory in South Korea is only 80% of the same period last year.

At this critical moment, a plant of Hyundai Steel, which accounts for more than 10% of the average daily supply of steel bars in South Korea, ceased production on the 10th of this month due to an accident, further leading to insufficient supply. At the same time, the price of scrap steel, the raw material for the production of steel bars, was reduced. It also rose by 80% during the year.

The decline in production capacity and the increase in raw material prices have led to a rapid rise in the price of Korean-made steel bars. The 10 mm diameter steel bar as a price indicator reached 970,000 won per ton, or about 5,544 yuan per ton on the 14th of this month, an increase of nearly 50% from the end of last year. For the first time since 2008, Korean steel bars exceeded 900,000 won per ton.

Nearly 40% of the steel used in the construction industry in South Korea comes from imports. However, due to strong domestic construction demand in the main exporting countries that provide rebars to South Korea, exports have fallen sharply. The price of imported rebars that were originally lower than Korean rebars increased by 60% year-on-year. , Even surpassing the steel bars produced in South Korea, and the low supply and high prices have made the shortage of steel bars in the Korean construction industry even worse.

In the case of imbalance between supply and demand, many small and medium-sized construction companies in South Korea have launched a fierce "rebar grabbing war". In some areas, the price of steel bars has been reported to more than 1 million won per ton, and it may even be impossible to buy with more money.

Recently, the South Korean government convened people in the steel industry to urgently discuss solutions and plans to centrally control the stockpiling of steel bars by middlemen. As the supply problem cannot be improved in the short term, industry insiders predict that South Korea’s “rebar shortage” is likely to continue until the end of this year.