South Korea's steel industry recorded export growth in June for the first time in 14 months, driven by rising demand from AI data center construction projects. Steel exports reached $2.14 billion in June, a 9.6% increase compared to the same month last year, according to the Ministry of Trade, Industry and Energy on July 12. The ministry attributed the recovery to increased steel material demand from expanding AI data center construction in the United States and other overseas markets, alongside a base effect from the US imposing a 50% steel tariff in June last year.
US Steel Exports Surge 58% in First Half
Exports to the United States showed particularly strong growth during the first half of the year. According to the Korea Iron & Steel Association, total steel export volume reached 14.34 million tons in the first half, a slight increase from 14.23 million tons in the same period last year. Within this total, US-bound exports jumped 58.3% from 1.39 million tons to 2.2 million tons.
The industry anticipates that full-scale AI data center construction will expand demand beyond construction steel materials such as rebar and bar steel to include steel pipes needed for power supply and cooling facility infrastructure.
Analysts Link Export Growth to Data Center Rebar Demand
Park Kwang-rae, research fellow at Shinhan Investment & Securities, stated in a recent Hyundai Steel earnings forecast report that "US-bound rebar exports have increased overall, supported by solid US rebar demand centered on data centers." Park added that "increased exports have reduced domestic rebar supply, which has also affected domestic rebar distribution price increases."
EU Implements 19.7% Quota Reduction on Korean Steel
Despite the positive US export trend, the industry faces ongoing challenges including high exchange rates increasing raw material costs, oversupply from China, and strengthening global trade barriers. The European Union began implementing new steel import regulations this month, reducing annual tariff-free import quotas by 46% and imposing 50% tariffs on volumes exceeding quotas.
South Korea negotiated to partially reduce the quota cut, but the annual tariff-free quota still decreased by 510,000 tons, a 19.7% reduction.
Government Announces Industry Support Measures
The government stated it will strengthen support to minimize damage to the steel industry and create new demand. Plans include expanding linkages between major downstream industries and the steel sector, and mandating submission of molten steel production location information for imported steel products to block circumvention of unfair import products, thereby enhancing industrial competitiveness.
FAQ
What caused South Korea's steel exports to increase in June?
Steel exports rose 9.6% to $2.14 billion in June due to increased demand from AI data center construction in the US and other markets, combined with a base effect from the US imposing a 50% steel tariff in June last year.
How much did South Korea's steel exports to the US grow in the first half?
US-bound steel exports increased 58.3% from 1.39 million tons to 2.2 million tons in the first half, according to the Korea Iron & Steel Association.
