The South Korean government has unveiled a KRW 400 billion ($278.41 million) steel export guarantee program to strengthen small and medium-sized enterprises in the domestic steel sector. The initiative, rolled out on November 4, 2025, aims to cushion the domestic industry against global market headwinds caused by oversupply, rising trade barriers and declining export competitiveness, according to local media reports.
The new program jointly supported by South Korean steelmaker POSCO Group, the Industrial Bank of Korea and the Korea Trade Insurance Corp., will allow the eligible enterprises to access preferential loans with interest rates up to two percentage points lower than standard rates. The support package also extends repayment periods from one year to three years and reduces guarantee costs from 1.0 percent to 0.7 percent, offering tangible relief to smaller players facing liquidity and competitiveness challenges.
Focus on general-purpose steel and rebar
The government’s initial focus under the new initiative will be the general-purpose steel segment, particularly rebar, a key material in South Korea’s construction industry. The sector has been severely affected by oversupply and weakening margins. To balance production and improve profitability, firms that voluntarily adjust their capacities will be eligible for tax incentives and financial assistance. Further measures are expected under the upcoming Steel Industry Special Act, designed to modernize and consolidate domestic steelmaking operations.
Policy tools to counter import pressures
In response to rising imports of low-cost steel, the South Korean authorities plan to tighten antidumping enforcement by extending duties to cases of circumvention through bonded zones and third countries, and to require the submission of certificates of origin for any steel imports from next year. This move reflects Seoul’s growing commitment to protecting domestic producers and ensuring fair trade practices amid intensifying competition from foreign suppliers.
Long-term vision: upgrading steel quality and technology
Beyond short-term financial support, the government has pledged a KRW 200 billion investment by 2030 to develop 10 new specialized carbon steel grades. The goal is to increase the share of high-grade steel in national output from 12 percent to 20 percent, surpassing Japan’s 17 percent and approaching Germany’s 38 percent.
Industry response
South Korean industry representatives have welcomed the program as a vital intervention to help the sector reach a potential turning point. However, several executives highlighted the importance of tailored, practical measures to address the specific operational challenges, particularly in financing, logistics and export market access.
