Stagnant domestic construction activity and declining exports weigh on the demand outlook in Q4 2022 and early 2023. Weakening global demand has caused the total industry’s export sales of galvanized steel sheets & steel pipes to continue falling YoY each month since mid-2022 vs 2021’s base. On the other hand, domestic sales — which were significantly hurt in H2 2021 due to COVID-19 — experienced a meaningful recovery in Q3 2022 that helped to partially offset the decreased exports. However, we expect stagnant domestic construction activities — especially from the private sector — will weigh on the recovery momentum of domestic sales in Q4 2022, which together with continuing weak exports should dampen the demand outlook for galvanized steel sheets & steel pipes in Q4 2022 and early 2023. Therefore, we forecast modest YoY sales volume growth for both HSG (+3% YoY in FY2023F vs FY2022) and NKG (flat YoY in 2023F vs 2022F).

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