POSCO "Pohang Steelworks Sales Loss of 2 Trillion Won... Normalization to be Pursued Within 3 Months"

Pohang Steelworks Expected to Face Disruption in 1.7 Million Ton Product Output
Group Focuses All Efforts on Normalization

Expected Start Time for Product Production at Pohang Steelworks.

[Asia Economy Reporter Kwangho Lee] Recently, the Pohang Steelworks, which suffered flood damage due to a typhoon, is expected to incur losses of 2.04 trillion KRW. Amid this, POSCO plans to restore all processes within three months and strive to minimize the impact on domestic steel supply and demand.

According to POSCO on the 16th, the Pohang Steelworks is expected to experience a production disruption of 1.7 million tons of products due to the effects of Typhoon Hinnamnor. POSCO plans to minimize the reduction in product sales to about 970,000 tons through maximum production at the Gwangyang Steelworks and sales of inventory. The resulting decrease in sales is projected to be 2.04 trillion KRW, which is about 2.7% of last year's consolidated sales. The sales decline was exacerbated by delays in normalizing the stainless steel (STS) division, including the STS cold rolling mill, which suffered relatively severe damage due to its proximity to the Naengcheon River.

POSCO plans to consider utilizing its overseas production subsidiaries such as Indonesia's PT.KRAKATAU POSCO, India's POSCO-Maharashtra, China's POSCO Zhangjiagang Stainless Steel Co., Ltd., and Thailand's POSCO-Thainox to supply domestic markets with products like heavy plates, hot-rolled, cold-rolled, coated, and stainless steel products if necessary.

POSCO is establishing a recovery plan for the rolling lines prioritizing the supply of products needed by customers. Specifically, it aims to restart the 1st cold rolling and 2nd electrical steel sheet by the end of September; the 1st hot rolling and 2nd and 3rd heavy plates in October; the 1st and 4th wire rods and 2nd cold rolling in November; and the 3rd wire rods, 2nd cold rolling, and 2nd hot rolling stainless steel mills in early December.

POSCO normalized all three blast furnaces by the 12th and completed the restoration of the steelmaking and continuous casting plants, which adjust molten iron composition and produce semi-finished products (such as slabs), on the 15th, thus normalizing the crude steel division. The 3rd electrical steel sheet mill, which suffered relatively less damage, has also been restored and resumed operations from the previous day.

Following the normalization of the crude steel division, POSCO plans to concentrate equipment and manpower in the rolling area severely damaged by the Naengcheon River flooding to accelerate recovery work such as removing mud from underground facilities, cleaning equipment, and repairing parts.

A POSCO official stated, "We will fully focus the group's capabilities on the restoration to ensure that the established recovery plan is implemented without delay, minimizing the impact on the domestic steel industry and the national economy."