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POSCO Holdings. (Photo=Yonhap News) |
[Alpha Biz= Reporter Kim Jisun] POSCO has made a significant decision to shut down two of its plants this year, including one in July and another on November 19. This move is seen as an urgent response to the flood of low-priced Chinese steel products in the domestic market due to China's overproduction, which has severely impacted profitability.
The plants in question, Pohang Steelworks’ No. 1 Steelmaking Plant (closed in July) and No. 1 Wire Rod Plant (shut down on November 19), hold significant historical value for POSCO. Analysts view these closures as evidence of the pressing need for restructuring within the company. POSCO and other domestic steelmakers are implementing measures to address financial challenges, such as divesting low-margin assets and suspending underperforming facilities.
The No. 1 Steelmaking Plant symbolizes a milestone in South Korea's steel industry. It was part of the first phase of the Pohang Steelworks, alongside plate and hot-rolling plants, which were completed in 1972. In June 1973, the blast furnace was ignited, and with the completion of the No. 1 Steelmaking Plant the same month, South Korea's first integrated steel mill was officially operational.
This plant was also the first in the country to introduce a converter system for steel production. During the 1980s, a period of automotive industry growth, the plant produced critical components like tire cords and engine valve materials. Over the years, it expanded its capabilities to include wire rods and slabs for ultra-thick plates, marking its role as a cornerstone of South Korea’s steel industry.
POSCO’s decision underscores the challenges facing domestic steelmakers as they navigate a market increasingly dominated by Chinese oversupply and low-cost competition. The move highlights the urgency of adapting to global market dynamics while preserving long-term sustainability.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
