Hyundai Steel will halt production at its Pohang No. 2 plant due to a slump in steel demand. This comes about six months after it rescinded a shutdown directive issued at the end of last year in response to opposition from the labor union.
Hyundai Steel announced on the 12th that its Pohang No. 2 plant has entered an indefinite shutdown since the 7th due to a lack of demand. The shutdown has continued except for the labor-management meeting held on the 9th and 10th. During the shutdown period, 70% of salaries will be paid.
A Hyundai Steel official said, "The demand for construction steel, including rebar, is expected to decline in the medium to long term, and with the aging facilities, we determined that profitability is not feasible, making further investment difficult. It is time to reorganize and enhance business efficiency."
The Pohang No. 2 plant had been operating at reduced capacity since the end of last year, as it assessed that normal operations were not possible. After the operating rate fell to 10%, production was halted on November 25, but the shutdown was rescinded due to union opposition. However, the steelmaking process was shifted from a four-team, two-shift system to a two-team, two-shift system, and the rolling process was halted. The production volume of the Pohang No. 2 plant accounts for about 3% of Hyundai Steel's total output.
Workers from the Pohang No. 2 plant are expected to be reassigned to other plants, such as the Dangjin site. A Hyundai Steel official noted, "Dangjin, which has a demand for electric arc furnace composite processes, needs workforce, so there is a high possibility they will be allocated there. We will discuss future directions in the labor-management meeting."
Facing difficulties due to a recent downturn in the industry compounded by unfavorable tariffs from the United States, Hyundai Steel announced a plan to invest $5.8 billion (approximately 8 trillion won) in an electric arc furnace steel mill in Louisiana. It recorded an operating loss of 19 billion won in the first quarter, marking a transition to a deficit. Revenue decreased by 6.5% compared to the same period last year, totaling 55.635 trillion won.