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.
Hyundai Steel seeks to shut down Pohang plant
Hyundai Steel's plant in Pohang, North Gyeongsang Province / Courtesy of Hyundai Steel
By Park Jae-hyuk
Hyundai Steel has been pushing to shut down one of its factories here, as the sluggish construction market and the oversupply of low-priced steel products from China have deteriorated the profitability of the Korean steelmaking sector.
On Wednesday, the steelmaking unit of Hyundai Motor Group informed its employees of its intention to halt the operation of its No. 2 factory in Pohang, North Gyeongsang Province.
The company said that the final decision will be made after its management’s meeting with union leaders and other employees between Thursday and Friday.
Hyundai Steel’s union is reportedly opposing the factory’s closure, but it remains uncertain whether the steelmaker will resume the factory’s operation after the shutdown.
Earlier this year, Hyundai Steel carried out a half-year overhaul of its Incheon plant’s facilities in an apparent attempt to reduce output amid the slow demand.
Hyundai Steel’s steel mill in Dangjin, South Chungcheong Province, is also under repair.
In July, the steelmaker filed anti-dumping complaints with the government against the import of low-priced thick steel plates from China.
However, these measures were not effective enough to prevent the company’s third-quarter operating profit from plunging 77.4 percent year-on-year to 51.5 billion won ($36.6 million). Its net loss also reached 16.2 billion won.
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Securities analysts expect Hyundai Steel and other Korean steelmakers to face a tougher business environment next year under the presidency of Donald Trump, who is poised to impose hefty tariffs on imports to the U.S.
“The incoming Trump administration will likely build higher steel import barriers,” Hyundai Motor Securities said in a report published Tuesday.
“Mexico is regarded as the main target at this moment, but it is too early for Korea to relax.”