Hyundai Steel closes half of its rebar production capacity in Incheon

Hyundai Steel, South Korea’s second-largest steel producer, is closing one of its rebar production lines at its Incheon plant, as well as a 90-ton electric arc furnace. This was reported by Mysteel Global, citing the company’s announcement.

The decision was announced after Hyundai Steel’s management reached an agreement with the plant’s labor union on January 20. It did not come as a surprise, as the rolling mill in question (with an annual capacity of 750,000 tons, while the plant’s total capacity for this product is 1.6 million tons) and the plant’s steelworks had been suspended since January 4 this year. Last April, Hyundai suspended all production in Incheon for about a month, waiting for market conditions to improve.

With the final closure of the rolling mill in Incheon, the combined rebar production capacity of Hyundai Steel’s three plants – the other two are located in Pohang and Dangjin – will fall from 3.35 million tons per year to 2.6 million tons.

In total, the capacity of South Korean rebar producers, including Hyundai Steel, Korea Iron & Steel, YK Steel, and others, is about 12.3 million tons per year. However, according to Korea Steel Daily, the nominal consumption of this product last year, including imports, was only about 7 million tons.

The rest of Hyundai’s statement refers to the simultaneous reorganization of its two other plants. In the future, the company will focus its activities in Pohang exclusively on the production of rebar and will transfer the production of specialized rolled products for the automotive industry to Dangjin.

Korean industry analysts suggest that the steel manufacturer is preparing for a large-scale restructuring of the metallurgical sector. In November last year, the Ministry of Trade, Industry, and Resources announced a plan for the development of the steel industry, which provides for a reduction in capacity in the industry. The government has identified rebar as a representative position and this sector as one where adjustments are inevitable.

At the end of last year, Hyundai Steel announced an investment program worth 170 billion won ($116 million) until 2032 to secure high-quality scrap and develop low-carbon raw material production capabilities.