Hyundai Steel to cut production by half due to weak demand
Hyundai Steel's automated tagging robot at the company's plant in Dangjin, South Chungcheong Province / Courtesy of Hyundai Steel
Hyundai Steel, Korea's second-largest steelmaker, said Tuesday it will cut production by half at one of its three domestic steel reinforcement bar (rebar) plants due to weak demand.
The company plans to permanently shut down one of two production lines at its 1.6 million-ton-a-year rebar plant in Incheon, west of Seoul, a company spokesperson said, adding that the other two rebar plants will remain operational.
The decision comes as rebar demand has slumped amid a prolonged downturn in the construction industry and an oversupply in the market.
Hyundai Steel said the planned output reduction will not result in layoffs. Workers affected by the shutdown will be reassigned to other production lines following consultations with the labor union, it added.
"Domestic rebar demand totaled about 7 million tons last year, while local steelmakers' production capacity reached 12.3 million tons," an industry official said. "Restructuring appears inevitable in the steel industry amid chronic oversupply."
The government has also identified rebar as a sector suffering from persistent oversupply in its steel industry advancement plan released on Nov. 4, calling restructuring in the segment "inevitable."