South Korean steel producer Dongkuk Steel will halt all rebar production at its Incheon plant for about a month between July and August due to the prolonged steel demand decline caused by the construction industry slump, according to local media reports. The Incheon plant, which has never been inactive before, is South Korea's largest rebar production site, with a 2.2 million mt annual capacity representing 40 percent of Dongkuk Steel's sales.
The producer stated that, despite cutting production to 50 percent utilization and switching to night operations to reduce costs, it can no longer sustain operations amid the chronic oversupply problem and rising electricity and raw material costs. According to local media, the producer aims to lessen the effects of the cutthroat competition in the rebar market.
The shutdown from July 22 to August 15 will reduce supply by 200,000 mt. The company will monitor market conditions and may extend the closure if oversupply persists. Pre-contracted orders will be fulfilled using existing inventory.
