Posco mulls suspending one of its four steel plate mills

14 November 2016

South Korea’s largest steelmaker Posco is mulling to suspend operation of at least one of its mills producing steel plate, an area the government named in need of streamlining for overcapacity and poor demand.

Posco chief executive Kwon Oh-joon told trade minister Joo Hyung-hwan visiting its steel mill in Gwangyang on Wednesday that the company plans to adjust the output capacity on steel plate in response to weakened demand.

The government in restructuring proposal for steelmaking released in September advised steelmakers to reduce production capacity on steel plate amid poor demand due to slump in the shipbuilding industry by reducing the number of furnaces to three from current seven. Posco runs four, Hyundai Steel Co. two and Dongkuk Steel Mill Co. one.

The industry produced about 18 million tons of steel plates last year, exceeding demand by 4 million.

Posco has three steel plate mills in Pohang and one in Gwangyang capable of turning out 7 million tons. Last year’s output was 5.7 million tons. Output would be lessened by 1 million tons if one of the lines is closed.

Dongkuk Steel Mill shut down a steel plate plant with annual capacity of 1 million tons in 2012 and another with capacity of 1.9 million tons in August this year.

Posco said suspension does not necessarily mean shutdown as the decision hinges on market demand and outlook.

Source – Tradewind