Reasons for the Low Prices of Chinese Hot Rolled Plates

The low prices of Chinese hot rolled plates are attributed to several economic and industrial factors. The main reasons are as follows:

1. Decline in Iron Ore Prices

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The price of iron ore, a key raw material for hot rolled plate production, has decreased in recent years. Iron ore accounts for about 40% of the production costs of hot rolled plates, and China has established a structure that allows it to purchase iron ore in large quantities and produce hot rolled plates at lower prices. For instance, in 2024, the price of iron ore was reported at $106 per ton, which is about a 27% decrease compared to the beginning of the year¹².

2. Overproduction

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The Chinese steel industry is implementing a strategy of exporting overproduced volumes at low prices to overseas markets. This has led to a decline in hot rolled plate prices in the domestic market, making Chinese hot rolled plates competitive in the South Korean market. As of 2024, imports of Chinese hot rolled plates significantly increased compared to the previous year, expanding their market share domestically³².

3. Improvement in Quality

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In the past, Chinese hot rolled plates were considered inferior in quality compared to domestic products, but recently their quality has risen to nearly match that of domestic products. Consequently, in a situation where the quality difference is minimal, cheaper Chinese hot rolled plates are preferred⁴⁵.

4. Low Price Strategy

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Chinese hot rolled plates are sold at approximately 100,000 to 200,000 won less per ton than domestic plates. For example, as of 2025, the price of Chinese hot rolled plates is about 785,000 won per ton, while the price of domestic plates is around 900,000 won, resulting in a price difference of about 12.7%⁶².

5. Lack of Anti-Dumping Duties

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Before any anti-dumping duties were imposed on Chinese hot rolled plates, their price competitiveness was even more pronounced. Prior to the duties, these plates were distributed at low prices in the domestic market, significantly impacting the South Korean steel industry⁶⁵.

Conclusion

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The aggressive pricing of Chinese hot rolled plates results from a combination of factors including declining iron ore prices, overproduction, quality improvements, and low distribution prices. This situation has intensified conflicts between the domestic shipbuilding and steel industries, necessitating the formulation of measures to stabilize the market¹³².