Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
POSCO, Hyundai, Dongkuk grapple with steel industry downturn
POSCO employees work at the company's main steel mill in Pohang, North Gyeongsang Province, in this June 2023 file photo. Courtesy of POSCO
By Park Jae-hyuk
Major steelmakers in Korea have tightened discipline among executives and reduced output to overcome difficulties caused by the global oversupply of steel products and domestic construction industry downturn, according to industry officials, Sunday.
POSCO asked its executives recently to return to a five-day workweek as before.
Earlier this year, the nation’s leading steelmaker allowed its non-shift employees, who are expected to work a minimum of 40 hours a week, to take a Friday off every two weeks if they have worked at least 80 hours during the previous nine weekdays.
The company denied speculation that it may force its non-executive employees to stop taking a Friday off every two weeks.
“We have made company-wide efforts to restore our competitiveness in the steelmaking industry,” a POSCO official said. “To raise awareness of the crisis among our management, only our executives are obligated to return to the five-day workweek.”
An electric arc furnace operates at Hyundai Steel's Incheon factory in this undated file photo. Courtesy of Hyundai Steel
Hyundai Steel has been repairing the electric arc furnace at its Incheon factory since February, with the aim of finishing the work by the end of this month. The four-month repair was intentionally drawn out to cut production, given that such maintenance generally takes only a couple of weeks.
Hyundai Motor Group's steelmaking unit also plans to start a three-month repair and maintenance period on the electric arc furnace of its Dangjin factory in South Chungcheong Province in September.
"To cope with the oversupply of Chinese products, Hyundai Steel is expected to reduce its output additionally during the second half of this year," Daishin Securities analyst Lee Tae-hwan said.
Dongkuk Steel decided recently to stop the operation of its Incheon factory's electric arc furnace during the day and run it only at night from 10 p.m. to 8 a.m. The decision is intended to pay smaller electricity bills for off-peak use and decrease production amid the slow demand for rebar for buildings.
The company seeks to reduce output by roughly 35 percent through nighttime operations.
"To brace for the prolonged economic recession, we will manage our production flexibly and improve our profitability," a Dongkuk Steel official said.
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Industry officials expect the slump in the steel industry to continue for a while.
"The steel industry is facing the toughest-ever situation recently due to the transition to a low-carbon economy, lingering uncertainties about the global trade environment and intensifying competition with companies in neighboring countries," POSCO Group Chairman Chang In-hwa said during the celebration of the Day of Steel on June 3.