Seoul, June 11 (IANS) Hyundai Steel, South Korea’s second-largest steel manufacturer, has temporarily shut down its No. 2 plant in the southeastern city of Pohang due to a prolonged industry-wide slump, the company said on Wednesday.
The suspension took effect Saturday due to a lack of production volume amid severe industry-wide demand contraction. A company official said future decisions will be made through discussions with the labour union.
The latest move marks a reversal from Hyundai Steel’s earlier decision. In November last year, the company, a unit of Hyundai Motor Group, announced a plan to close the plant due to low operations but later reversed it following strong opposition from the union. The company decided to scale down operations instead, reports Yonhap news agency.
However, continued weakness in global demand, compounded by sluggish domestic market conditions, has led to the latest decision for a full suspension of operations at the facility.
The company has been dealing with a tough business environment this year, including steel tariffs imposed by Washington under U.S. President Donald Trump. Earlier this year, Hyundai Steel began offering voluntary retirement packages to workers at its Pohang complex as part of restructuring efforts.
Hyundai Steel is also reportedly pushing to sell off its heavy machinery division at Pohang plant No. 1 to streamline underperforming business units.
A two-fold increase in U.S. tariffs on steel and aluminum imports is expected to deliver a heavier blow to South Korean steelmakers already grappling with oversupply and falling prices amid an economic slowdown, industry sources said.
Trump signed an executive order doubling tariffs on all steel and aluminum imports from 25 per cent to 50 per cent.
Local steelmakers, including POSCO Group and Hyundai Steel Co., have been seeking ways to cope with the “U.S. steel barrier,” or at least minimize the impact of the steep tariffs on their operations.
–IANS
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