Global Steel Trade; Structural Problems and Future Solutions

61. Catholic University of Korea Professor Mahnsoon Kwack, and Associate Professor Dong Joon Min,
interview by Department of Commerce analysts, November 17, 1999, Catholic University of Korea offices, Seoul.
62. KFTC, November Report.
63. POSCO’s domestic sales figures derived from Government of Korea March 9, 1999, Response to USTR’s
Questions. Percentages derived for all other Korean producers domestic sales of domestic production is a function of
(POSCO’s domestic sales/domestic sales of domestic production). Domestic sales of domestic production is a
function of (all producers production of finished steel - exports of finished steel). Domestic production of finished
steel data from CMA-Korea, “Part 2: The Steel Market and Market Trends: Table 2-1.” Exports of finished steel data
from Metal Bulletin Research, MBR, Profile, 93.
64. CMA-Korea, “Steel Questions Four, Part 3.”
65. Figures derived from CMA-Korea, “Part 2: The Steel Market and Market Trends: Table 2-6.”
66. POSCO export figures from Government of Korea March 9, 1999, Response to USTR’s Questions; data for all
other Korean producers derived from Global Trade Information Services, Inc., World Trade Atlas: Korea CD-Rom,
(June 1999) [Hereinafter GTIS, WTA-Korea].
67. Korean exports of plate to the U.S. increased by over 313,000 tons from 1997 to 1998. It appears that over 80
percent of this increase was exports of plate by Dongkuk. Government of Korea March 9, 1999, Response to USTR’s
Questions.
68. CMA-Korea, “Steel Market and Market Trends: Part 2.2: Domestic Demand, Table 2-4.”
69. Imports of finished steel fell from 5,667 thousand MT in 1997 to 1,980 thousand MT in 1998. Data adapted
from Korea Iron & Steel Association, POSCO Research Institute and Korea International Trade Association for
CMA-Korea, “Steel Market and Market Trends: Table 2-4.” Foreign producers’ import penetration (imports as a
percent of apparent consumption) for finished steel declined from 15 percent in 1997 to 8 percent in 1998. Compiled
from CMA-Korea, “Steel Market and Market Trends: Table 2-4.”
70. Exchange rate comparison made on a yearly average. Figures obtained from Federal Reserve Statistical
Release H:10, available from http://www.bog.frb.fed.us/realeases/H10/hist; Internet, accessed May 18, 2000.
71. It’s important to note that while Korean finished steel exports to the United States rose by 152 percent in 1998
compared to 1997, U.S. steel imports from Korea rose by 109 percent in 1998 compared to 1997. One of the major
sources of such a difference would be the amount of time it takes for the product to be shipped to the United States.
In other words, some steel exports that were shipped in 1998 would be counted as U.S. imports in 1999; thus, the
export surge and import surge numbers are somewhat different. GTIS, WTA-Korea.
72. Id.
73. Korea’s exports thus became much more competitive, offsetting some of the loss in domestic demand.
According to Bank of Korea information cited in the CMA-Korea, “The Steel Market and Market Trends,” the
average exchange rate for 1998 was KrW1398.9/1USD. The average exchange rate for 1997 was KrW951.1/1USD. This
represents an average depreciation for the Korean won of 32 percent against the US dollar. At the same time, Korea’s
total exports of goods and services increased by 13 percent in volume terms in 1998. International Monetary Fund,
IMF Staff Country Report No. 00/11: Republic of Korea: Economic and Policy Developments (Washington, D.C.,
February 2000), 16.
74. Korea Iron & Steel Association, Korean Steel Industry Outlook for 1999: Declining Steel Exports in ‘99
Amidst Rebound in Domestic Demand, (Seoul, April 1999), 23.
75. CMA-Korea, “Steel Market and Market Trends: Part 2.2: Domestic Demand.”
76. Ibid., at table 2.1.
77. Korea Iron & Steel Association, information translated and excerpted for CMA-Korea, “Follow up Questions
2.”
78. Id.
79. Id.
80. GTIS, WTA-Korea. While the volume of Korean exports might be expected to increase substantially due to
the decline in domestic demand and the sharp depreciation of the won, to some extent these effects would be offset
by the fact that the Korean steel industry relies a great deal on imported raw materials, which are often priced in U.S.
dollars. As an importer of raw materials, Korean producers would face significant increases in the won-denominated
cost of these imports, to the extent that they were priced in U.S. dollars or were sourced from countries unaffected by
the region’s financial crisis. These more costly won-denominated raw materials would thus offset some of the
advantage gained from the Korean won’s depreciation.
81. Id.
82. See http://ia.ita.doc.gov/stats/caselist.txt; Internet.
Notes 215