South Korean cement producers face cartel probe

South Korean cement producers face cartel probe
Published: 10 April 2013

Tagged Under: South Korea Pricing Cartel 

Seven cement producers in South Korea are being investigated by the country’s Fair Trade Commission for alleged price collusion.

According to local press reports, the commission sent its investigators on the 9 April 2013 to the sites of Ssangyong Cement Industrial, Hanil Cement Tongyang Cement, Sungshin Cement, Lafarge Halla, Asia Cement, and Hyundai Cement in order to conduct the probe which is expected to last two days.

An industry source told the Korea Economic Daily: “Lately cement producers and ready-mixed concrete operators are at loggerheads over cement prices. It appears the Fair Trade Commission is looking closely into the matter.”

Traditionally, actual selling prices in South Korea are discounted from the list price, according to the market situation, customers involved and their sales terms and conditions. However, in January 2012, producers notified a price rise of 15 per cent from KRW67,500 (US$60)/t to KRW76,000. This was fiercely disputed by the ready-mix concrete industry, with some refusals to pay invoices and consequent blacklistings. There were at least two government interventions in the dispute over the following six months, but only minor offers of compromise emerged from both sides and it remains unclear as to just how much of the price increase has been sustained.