South Korea’s Fair Trade Commission (FTC) has slapped a record fine of combined 119.4 billion won ($105.9 million) on six rebar suppliers including majors Hyundai Steel Co. and Dongkuk Steel Mill Co., for price fixing between 2015 and 2016.
The antitrust watchdog said Sunday that it discovered the country’s six leading reinforced steel makers - Hyundai Steel, Dongkuk Steel Mill, KISCO, YK Steel Corp., Hwan Young Steel Ind. Co., and Daehan Steel Co. - had colluded to cap discount rates on steel bar prices to sell them at higher prices over 12 occasions between May 2015 and December 2016.
The FTC fined six companies combined 119.4 billion won, which is the largest levy in the industry since 1990, and filed criminal charges on five excluding YK Steel.
By companies, Hyundai Steel was slapped with the largest penalty of 41.8 billion won, followed by Dongkuk Steel Mill with 30.2 billion won, KISCO with 17.5 billion won, YK Steel with 11.3 billion won, Hwan Young Steel Ind with 11.3 billion won, and Daehan Steel with 7.3 billion won.
Those six companies together command 81.5 percent of the reinforced steel market, suggesting that their price-rigging would have played a crucial role in determining wholesale prices, said FTC. According to its finding, the six steel makers colluded on setting discount rates on steel bar prices to prevent a steep fall in prices against the flood of cheap Chinese imports and softening in prices of scrap metals - raw material for steel bar.
Top-tier rebar prices are usually set through negotiation between industry leaders Hyundai Steel and Dongkuk Steel and builders. Smaller players try to sell at a lower price to win orders.
Stocks were undisturbed by the news.
On Monday, Hyundai Steel shares gained 3.5 percent to end at 56,200 won, Dongkuk Steel Mill shares up 1.6 percent at 9,530 won, KISCO shares up 1.89 percent at 6,460 won, and Daehan Steel shares up 1.71 percent at 7,130 won. YK Steel and Hwan Young Steel Ind are unlisted.
By Seok Min-soo and Cho Jeehyun
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