EcoPro Pohang Campus (Image courtesy of EcoPro)
POHANG, South Korea, Dec. 5 (Korea Bizwire) — The industrial heart of Pohang, once buoyed by its thriving secondary battery and steel industries, is grappling with a severe economic downturn, underscoring the fragility of the region’s core sectors.
The city, home to major players like EcoPro, POSCO Future M, and GS Energy Materials, has been at the forefront of the secondary battery boom. These companies produce key battery components such as precursors, cathode materials, and recycled battery products.
However, the sector has hit a slump, driven by a temporary slowdown in global electric vehicle demand and rising supply chain disruptions.
Operational capacity at local battery companies is estimated to have plunged to around 30%, according to industry insiders, with some delaying factory expansions or halting operations altogether.
For instance, POSCO Future M recently scrapped a joint 1.2 trillion won precursor project with China’s Huayou Cobalt, citing market uncertainty. Similarly, EcoPro BM has postponed a 473.2 billion won expansion of its high-nickel cathode material facilities until 2026.
Even the burgeoning battery recycling industry, championed by firms like Energy Materials, is stalling due to insufficient supply of end-of-life batteries.
The crisis extends to Pohang’s foundational steel sector, with the global recession, Chinese oversupply, and domestic construction woes taking a toll. POSCO and Hyundai Steel have shuttered several facilities, while worker layoffs have so far been averted.
Subcontractors, however, report declining revenues as major players reduce logistics and maintenance spending.
The broader impact is evident. Employment in Pohang’s industrial zones has dropped by 16.4% over the past decade, while output has declined by 10% in the last year alone. Local officials warn that the economic malaise threatens long-term employment and population stability.
Pohang’s Mayor Lee Kang-deok has urged the central government to intervene, proposing measures such as subsidies, tariff protections, and extended support for small and medium-sized enterprises.
“Immediate government action is critical to mitigating the challenges faced by our core industries,” he said.
As Pohang weathers the storm, its industries and workers brace for prolonged uncertainty, highlighting the urgent need for structural reforms and strategic investment to ensure the city’s economic resilience.
Ashley Song (ashley@koreabizwire.com)
