South Korea’s six largest steel companies were fined a combined total of 119 billion won ($105 million) by the antitrust watchdog for fixing the prices of steel reinforcement bars, officials said Sunday.

According to the Fair Trade Commission, the six steel producers fixed prices by reducing discounts during the period from May 2015 to December 2016, significantly lowering the market price of steel rebar. 

The six local steel manufacturers included Hyundai Steel and Dongkuk Steel Mill, which were fined 41 billion won and 30 billion won, respectively. In addition, the FTC plans to report five of the six companies – all except for YK Steel -- to prosecutors.

Steel rebar is used in reinforced concrete and reinforced masonry structures. It is frequently used in civil engineering and construction.

Six steel companies -- Hyundai Steel, Dongkuk Steel Mill, Korea Iron & Steel, Daehan Steel, Hwanyoung Steel and YK Steel -- currently dominate the local steel rebar market with an around 81 percent share and combined sales of 5.2 trillion won.

Among them, Hyundai Steel and Dongkuk Steel Mill lead the market with a 32.9 percent share and a 27 percent share respectively. The remaining four companies have an around 10 percent share each.

Sales managers of the six companies met around 30 times during the 20-month period. After each meeting, the companies reduced discounts on the price of steel rebar.

For instance, in May 2015, they set the discount limit at 80,000 won so that the distribution price of steel rebar would not fall below 520,000 won per metric ton. The following month, they also reduced discounts of 20,000 won from the previous month so that the price would not fall below 540,000 won per ton.

The antitrust authority said the price fixing had affected the real market price and the companies had repeated the practice when the effects had weakened over time.

“Imposing strict sanctions on price fixing of steel rebar will boost competition in the material market,” said a FTC spokesperson.

The steel industry, however, said the fine was “unfair,” as the price negotiations on steel rebar originally started from the government arbitration around 2011 amid a growing dispute between construction companies and steel companies over an increase in the price of steel rebar.

According to the steel industry, the consultative meeting for steel rebar prices was set up under the arbitration of Finance Ministry and Transportation Ministry to avoid excessive disputes, and the government had intentionally overlooked the price decision made every quarter.

By Shin Ji-hye (shinjh@heraldcorp.com)