South Korean steel producer Dongkuk Steel plans to shut down its plate mill No. 1 at Pohang as of June 10, due to overcapacity in the domestic market, as reported by South Korean industry sources. The plate mill No. 1 is 22 years old.
The company has been considering closing the plate mill since the completion of the construction of its 1.5 million mt annual capacity plate mill at Dangjin.
The Pohang plate mill No. 1 produces plate in thicknesses of 6-100 mm and maximum width of 3,000 mm. Meanwhile, the Pohang plate mill No. 2 and the Dangjin plate mill can both produce wide plates. The planned shutdown of the Pohang plate mill No. 1 is attributed to low productivity, high production costs, the limited size range, oversupply and increasing imports.
The plate mill No. 1 has an annual production capacity of 1 million mt, but current output is 600,000-700,000 mt per year.
After losing the mill No. 1's capacity, Dongkuk Steel's steel plate output capacity will be 3.4 million mt per year, comprising Pohang Mill No. 2's 1.9 million mt per year and the Dangjin mill's annual output capacity of 1.5 million mt. The company plans to upgrade productivity at these two mills in order to minimize loss of capacity.
The company assumes that the two remaining mills will be able to meet demand, as the shipbuilding industry is depressed and as plate demand is decreasing.