The goal of this study is to define the future prospects and policy implications of the Korean steel industry, by surveying and analyzing its current conditions and structure.
In general, the steel industry is related to a wide range of other industries. In the recent years, the collaboration between computer technology and steel manufacturing is on noticeable rise. Under the first Five-Year Economic Plan in 1962, the Korean steel industry produced 142,000 metric tons of goods, and exported only 26,000 metric tons, while importing 123,000 metric tons of steel goods and materials from overseas. From 1962 to 1976, the steel industry grew at rate of 22 percent a year, with its productivity increasing by 27.5 percent annually. By 1977, the steel industry exported 1.34 million metric tons and imported 1.12 metric tons.
The world economy that experienced an unprecedented boom in 1973 and 1974 suddenly fell into a serious recession in 1975. The steel industry was not immune to the repercussions of the recession, with its output falling by nine percent, to 650 million metric tons, in one year. Japan and Europe, major steel manufacturers, together held a market share of 85 to 87 percent in 1973 and 1974, but saw their share drop to 65 percent by 1975.
As Korea’s industrialization progresses, the country’s export-oriented industries have undergone dramatic changes due to Korea’s comparative advantages and position within the world market. With the emerging need for developing new exporting industries, the Korean industrial structure is experiencing rapid and significant transformations. The steel industry, one of the heavy and chemical industries fostered by the Korean government, requires far greater investment in equipment and massive amounts of social overhead capital compared to other industries. Although the steel industry is crucial as a source of basic materials for other industries, the inelasticity of the prices of its products and the unstable trade structure leave the industry vulnerable. As the government needs to intervene in not only the pricing of steel products, but also the trade environment for steel goods, Korean policymakers need especially be careful in developing policies for the steel industry.
The Korean steel industry can achieve stability only when the existing facilities are given a structural reform, while the prices of its goods are brought into greater conformity with the changing international trade conditions
철강공업의 특성과 수급구조(Characteristics and supply-demand structure of steel manufacturing)
|Series Title; No||연구총서|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Manufacturing|
|Holding||KDI; KDI School|