This study identifies contemporary issues in Korea’s steel and non-ferrous metal industries, with an objective of providing policy-based solutions. This study also provides long-term supply and demand forecasts regarding these industries, providing the basic data the Korean government requires in order to develop its fifth Five-Year Economic Plan and readjust its investment in heavy and chemical industries.
The steel and non-ferrous metal industries form the core of Korea’s heavy and chemical industrialization drive, as they provide the basic materials crucial to the development of production facilities and infrastructure throughout the nation. The growth of these industries is vital, not only for the modernization of Korea’s industrial structure, but also for ensuring steady supplies of basic materials.
The dramatic growth of the Pohang Steel Company in the 1970s has helped the Korean steel industry to make a successful transition from import substitution to export orientation. Other non-ferrous metal industries continue to operate with import substitution as their primary goal. These industries require massive investment in the creation of production facilities as well as social overhead capital, while also relying heavily on imported raw materials for their operations. They are also heavy energy users. Therefore, the government needs to establish policy regulating the facilities, prices, and trade activities of these industries.
This study surveys the current status of Korea’s steel and non-ferrous metal industries and identifies their problems, providing suggestions for policy solutions. Based on the analysis of resource distribution in Korea, the characteristics of the industries, international trends, and long-term demand forecasts, this study also provides long-term supply and demand forecasts for these industries, for the decade between 1981 and 1991.
The Korean steel industry will be able to maintain its lead over international competitors on the normal steel material market, provided it can continue to secure cheap labor. The energy cost, however, remains high due to the rising price of oil, and the high cost of scrap metal reflects the industry’s heavy reliance on imported foreign materials. The long-term supply and demand forecasts indicate that there will be 5.46 million metric tons and 13.57 million metric tons of steel needed by 1986 and 1991, respectively. These forecasts, however, do not take supply side imports into account.
The non-ferrous industries of Korea are unlikely to secure an edge over their international competitors, as the abundance of cheap labor in Korea is not sufficient to compensate for the shortages of capital and technology. From 1979 to 1991, the domestic demand for non-ferrous metals will increase at 9.0 percent for copper, 12.7 percent for aluminum, 10.9 percent for lead, and 7.1 percent for zinc, yearly, with domestic demand reaching 27.98 million metric tons for copper, 40.06 million metric tons for aluminum, 10.12 million metric tons for copper, and 16.5 million metric tons for zinc by 1991. Assuming that these industries will maintain the same level of production capacity from 1979, the copper and zinc industries will begin to experience supply shortages by 1985 and 1983, respectively. The aluminum and copper industries are already falling behind domestic demand. The shortage of supplies of these metals will worsen unless Korea increases its imports, or these industries expand their production.
한국금속공업의 전망과 정책과제(Prospects and policy tasks of the Korean metal industry)
[서울] : 한국개발연구원
|Series Title; No||연구보고서 / 제81-02권|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|