South Korea launches large-scale support for steel industry

The South Korean government has announced a new package of measures to support the steel industry, which is facing global overcapacity and rising trade protectionism, according to The Korea Times.

According to the Ministry of Trade, Industry, and Energy, the state will increase financial assistance, stimulate innovation, and promote the transition to high value-added steel production.

The plan includes the creation of a 400 billion won ($278 million) guarantee program to support steel exports, as well as 150 billion won for companies working with steel, aluminum, and copper products. The fund will be jointly financed by steel giant POSCO Group, Industrial Bank of Korea, and Korea Trade Insurance Corp.

The program allows companies to obtain preferential loans with reduced interest rates and extended repayment terms. The government will also continue negotiations with key trading partners to lift or ease restrictive measures, such as the US 50% tariff on steel imports or new EU safeguard mechanisms.

In addition, South Korea will introduce mandatory quality certification for steel imports from 2026 and step up its fight against dumping schemes.

As part of the sector modernization program, approximately 200 billion won will be allocated to R&D in the field of special carbon steels, as well as to the development of artificial intelligence-based technologies.

The government is paying particular attention to the green transition. The country will promote the development of hydrogen-based steel production technologies, which should strengthen the competitiveness of the industry and reduce CO2 emissions.

It should be recalled that the US and South Korea have reached a trade agreement that provides for a reduction in the US tariff on imports from that country to 15% instead of the previously promised 25%.

South Korea has agreed to invest $350 billion in the United States, including $150 billion in joint shipbuilding projects and another $200 billion in microchips, nuclear energy, batteries, and biotechnology. The country will also purchase $100 billion worth of American energy resources, including LNG, LPG, and oil. The government emphasized that this is in line with typical import volumes.