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By Choi Sung-jin
"POSCO will never build a new blast furnace, because there must be no more of it in Korea," POSCO Chairman Kwon Oh-joon said Wednesday.
His comment comes amid a world steel supply glut.
The per capita steel production of Japan and the United States remains at 800 kg and 400 kg, respectively, but that of Korea reaches 1,100 kg, Kwon said, pointing out what he dubbed the "overcapa(city). "
Not only Korean but foreign companies should refrain from aggravating the supply glut of steel products, said the head of the world's fourth-largest steelmaker, adding that Chinese makers are supplying up to 40 percent more than the demand from other industries.
China's steel production more than doubled from 350 million tons in 2005 to 820 million tons in 2014, accounting for more than 90 percent of the global output increase during the period, Kwon said in an interview with the Seoul Economic Daily. But the worldwide business slump reduced demand in the second-largest economy, forcing China's supply glut to spill over to other countries.
"If only Chinese steelmakers reduce their capacity by 30 percent, much of the supply glut will be resolved," Kwon said. Noting that China's steel companies are dispersed throughout the country and support the entire economy of surrounding regions, Kwon said any forced curtailing of production would trigger strong protests. "There will be extremely little even President Xi Jinping can do about it," he said.
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