Typhoon Hinnamnor, which led to multiple fires and floods at South Korean steelmaker POSCO’s steel plants in the southeastern city of Pohang and also hit Hyundai Steel facilities in the same city on September 6, is expected to result in big losses of finished steel production. However, the companies are planning to hike outputs at their other operating units, which will partially offset the expected losses.
Yesterday, POSCO stopped all facilities, including blast furnaces, rolling mills, etc, and said that the flooding of the electricity supply facility resulted in a power outage for the whole plant and the damage to production facilities increased. The normalization of work of this main transformer is the first task and the company said that it will repair it within 1-2 days and will try to finish its restoration in 3-6 days maximum, according to market sources.
But the repair of other facilities will be longer. Though POSCO has not yet issued the official estimations for the needed time for the resumption of the plant, according to market sources’ expectations the resumption of the steelmaking process may take around 10 days, but the hot rolling (HRC and plates) facility repairs could last for at least 3 months, or even up to 6 months, SteelOrbis learned.
According to preliminary estimations, the South Korean mills could lose at least 1 million mt of finished steel production and 500,000 mt of crude steel production in September. “Hyundai is also hit but POSCO got the bigger damage,” an Asian market source said.
POSCO said on September 7 that it will take all needed measures to restore production as fast as possible, while in the near future it will try to increase finished steel production at its Gwangyang Works, using slabs produced and stored in Pohang. According to the market sources, around 600,000 mt of slabs are at POSCO’s warehouses now. Hyundai Steel has said that it will also try to increase production at Incheon and Dangjin to offset losses from stoppages in Pohang.
POSCO has crude steel capacities of 17.9 million mt per year in Pohang with 2 hot rolling lines, three heavy plate factories, and production facilities to produce CRC and wire rod.
Hyundai Steel’s crude steel production is 3.2 million mt in Pohang.