Korea’s Posco will cut stainless crude steel

Thu 3 Jul 2008

South Korea's POSCO said on Monday it would cut stainless steel output by 25,000 tonnes in July due to inventory build-up as buyers delay purchases on expectations of lower prices.

"We've decided to cut output in July in an attempt to normalise market conditions and will keep our production schedule flexible," a POSCO spokeswoman said.

POSCO produces between 150,000 and 160,000 tonnes of stainless steel per month.

Prices of rustproof stainless steel, used in products ranging from kitchenware to machinery and aircraft, have come under pressure recently as prices of nickel, a key ingredient in the manufacture of the product, turned weaker since early March.

The price of nickel MNI3, which accounts for around 80 percent of the cost of making the alloy, fell to two-year lows early this month and was trading at around $22,950 a tonne, down a third from this year's high.

The decline has been attributed to growing fears for demand from the key stainless steel sector and the prospect of rising mine supply.

Shares in POSCO closed down 2.4 percent at 539,000 won before the announcement was made, lagging a 0.9 percent fall in the broader market . (Reporting by Miyoung Kim; editing by Keiron Henderson)

Source Reuters

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