South Korean steelmaker Hyundai Steel is considering shutting down its Pohang No. 2 plant indefinitely, due to the deteriorating domestic market, according to local media reports.
The downturn in the construction sector, due to higher costs and slackened demand, and oversupply of low-priced Chinese steel products were behind the company’s decision. Moreover, the plant in question has been operating with a capacity utilization rate of 10-20 percent for a while, resulting in losses.
The board of Hyundai Steel will make its final decision, following its meeting with the labor unions.
The Pohang No. 2 plant, which is the second-largest facility of the company, has a production capacity of 700,000 mt per year, accounting for about 10.0 percent of Hyundai Steel’s total long steel output. It mainly produces steel products for the construction sector.