SEOUL, June 12 (AJP) - Hyundai Steel has indefinitely suspended operations at its Pohang Plant No. 2, one of South Korea’s key production hubs for steel H-beams, citing deteriorating market conditions and a complete lack of production orders.
The shutdown, which took effect on June 7, marks a significant retrenchment for the nation’s second-largest steelmaker.
The Pohang facility had already been operating under a reduced two-shift system since late 2024 in response to weakening demand. A brief, two-day restart on June 9 and 10 at the request of the labor union failed to alter the company's course, and full suspension resumed on June 11.
A labor-management council meeting scheduled for June 12 is expected to focus on the plant’s future.
“We plan to proceed with future developments such as the operational suspension through smooth dialogue with the labor union,” a Hyundai Steel spokesperson said.
The company had previously considered permanently closing the plant in 2024 but retreated following strong opposition from labor groups. Instead, it opted to scale back operations. Since then, however, a prolonged slump in global steel demand and sluggish domestic consumption have forced the company to take more aggressive action.
Hyundai Steel has begun restructuring efforts that include a voluntary retirement program for technical staff at the Pohang complex. It is also moving to divest non-core operations, including the planned sale of its heavy machinery division located at Pohang Plant No. 1.
The company’s financial performance has mirrored its operational struggles. Operating profit fell 60.6 percent in 2024 to 314.4 billion won (approximately $232 million), with consecutive operating losses reported in the fourth quarter of 2024 and the first quarter of 2025.
External pressures have compounded Hyundai Steel’s challenges. The Trump administration has reinstated tariffs on imported steel, intensifying headwinds for Korean exports.
In response, the company is shifting its strategic focus to North America. It recently announced plans to build a $5.8 billion electric arc furnace facility in Louisiana, a move designed to mitigate trade frictions and capitalize on local demand in the United States.
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