Steel companies in the Pohang area are experiencing difficulties due to the global economic recession and oversupply from China. (Image courtesy of Yonhap)
POHANG, South Korea, Feb. 13 (Korea Bizwire) — The mood outside Hyundai Steel’s Pohang Plant 2 is one of unease. Employees show up for work, but operations remain largely stalled. “We come in, but there’s no production. It’s frustrating,” a worker in his 40s, employed by Hyundai IMC, a Hyundai Steel subsidiary, said on Monday.
The plant, which employs around 200 Hyundai Steel workers and another 200 from Hyundai IMC, has been in a state of uncertainty since late last year. Hyundai Steel initially planned to shut it down in November 2024 due to declining steel demand but opted for partial operations after pushback from labor unions. However, negotiations between management and the union over the specifics of the plant’s operation remain inconclusive, leaving production effectively halted since late 2024.
During a visit to the facility, the signs of inactivity were stark. While the parking lot was full, few trucks moved in and out for actual operations. The chilly weather only deepened the somber atmosphere, with shift workers seen hurrying off the premises, their heads bowed against the wind. A banner nearby, placed by a local civic group, read: “Stay strong, Hyundai Steel. Overcome this crisis together.”
Hyundai Steel is not alone in its struggles. Industry giant POSCO also shut down its No. 1 steelmaking plant at the Pohang Steelworks in July 2024, followed by the closure of its wire rod plant in November. While POSCO has refrained from immediate job cuts, opting instead for workforce reassignment, the downturn is rippling through suppliers and transport firms dependent on these steel giants.
The root of the crisis lies in a confluence of global factors: an economic slowdown and an oversupply of steel from China. According to the Pohang Steel Industry Complex Management Corporation, total production output from the industrial zone fell from 16.3 trillion won ($11.24 billion) in 2023 to 14.7 trillion won ($10.14 billion) in 2024. Steel exports declined from $3.34 billion to $3.15 billion over the same period.
Adding to concerns, former U.S. President Donald Trump has vowed to impose tariffs on steel imports, a move that could further destabilize the industry. While no formal executive order has been issued, South Korean steelmakers are bracing for impact.
POSCO officials are closely monitoring developments, noting that U.S. steel imports are subject to a quota system. “We need to determine whether these tariffs will apply to non-quota countries or include quota-bound nations like South Korea,” a POSCO representative said.
Hyundai Steel, though less reliant on exports to the U.S., acknowledges that any broader disruption to global steel trade could have industry-wide repercussions.
As South Korea’s steel sector navigates these headwinds, both Hyundai Steel and POSCO remain locked in uncertainty, watching global markets and policy shifts with trepidation. For now, workers in Pohang wait, hoping for clarity on their future.
M. H. Lee (mhlee@koreabizwire.com)
