South Korea-based steelmaker Pohang Iron and Steel Co. (POSCO) has announced that it plans to cut stainless steel output by about 100,000 mt from September to the end of the year, as the economic slowdown has hit the stainless steel market.
The company’s Pohang Works suffered heavy damage due to the flooding from the recent typhoon, as SteelOrbis previously reported. However, as stainless steel products have strong corrosion-resistance, product inventory can be used. As POSCO’s second stainless steel production line is scheduled to be restored in December, it is expected that there will be no supply disruption or price surges in the market.
POSCO stated that domestic customer demand is estimated to be about 326,000 mt until the end of the year, while market inventory is around 324,000 mt. POSCO’s inventories total 86,000 mt and it stated that it can guarantee product supply of 104,000 mt by alternative means.
In addition, the company is actively pursuing market stabilization measures in response to concerns about disruptions in the supply and demand of some stainless steel products due to flood damage at the Pohang Works. In order to stabilize the domestic market supply, POSCO plans to divert export materials to domestic consumption as much as possible, transferring slabs produced at Pohang Works to the Gwangyang Works or POSCO Zhangjiagang Steel in China to produce hot rolled products, while producing cold rolled products in Thailand at POSCO-Thainox.