Government Joint Inspection Team Visit ... Designation of 'Preemptive Industrial Crisis Response Area' for Normalization of Pohang Steel Industry

Ministry of Trade, Industry and Energy and Korea Institute for Industrial Economics and Trade Officials Visit Steel Company Damage Sites for On-Site Inspection

Pohang City Appeals for Swift Designation and Early National Budget Allocation to Preven

Pohang City Hall.

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongguk Lee] Pohang City, Gyeongbuk Province, announced that on the 28th, a government joint inspection team visited Pohang in relation to the designation of the "Preemptive Response Area for Industrial Crisis" to normalize the steel industry in the region damaged by Typhoon Hin Nam No.

The on-site inspection was promptly conducted following a meeting of related ministries on the 27th, after Pohang City and Gyeongbuk Province submitted their own plan and application regarding the "Preemptive Response Area for Industrial Crisis" to the Ministry of Trade, Industry and Energy on the 23rd.

To designate Pohang as a "Preemptive Response Area for Industrial Crisis," after the application, a written review and on-site inspection are conducted, and then the Industrial Crisis Response Deliberation Committee (Chair: Minister of Trade, Industry and Energy) deliberates and decides on the designation.

Earlier, on the 8th, Mayor Lee Kang-deok strongly requested the designation of the "Preemptive Response Area for Industrial Crisis" when Minister Lee Chang-yang of the Ministry of Trade, Industry and Energy visited Pohang to inspect companies affected by the typhoon.

On this day, the joint inspection team composed of officials from the Ministry of Trade, Industry and Energy, the Korea Institute for Industrial Economics and Trade, and related ministries visited Pohang City Hall, received an explanation on the "Need for Designation of the Preemptive Response Area for Industrial Crisis" from Son Jeong-ho, Director of the Job Economy Bureau of Pohang City, and held a discussion to exchange opinions.

After the discussion, the inspection team visited the Pohang Steelworks rolling mill and damaged companies in the steel industrial complex to hear about the damage and recovery status caused by the typhoon and toured the sites.

Due to this typhoon, over 100 companies in the Pohang Steel Industrial Complex reported enormous damage amounting to 1.0348 trillion KRW based on NDMS criteria, including flooding, building damage, and soil runoff. When indirect damages are included, the estimated amount is 4 to 5 times the reported figure, indicating that considerable time and cost will be required for recovery.

Moreover, it is expected that the normalization of operations at some POSCO factories related to these companies through product delivery will take 3 to 6 months, raising concerns about significant impacts not only on local economies such as partner companies and small and medium enterprises but also on national related industries.

The city stated that due to this typhoon damage, POSCO halted operations for the first time since producing molten iron in 1973, and 30% of companies in the steel industry complex suffered damage.

Pohang’s industrial composition consists of 38.9% manufacturing, and among manufacturing sectors, primary metals account for 84.6% based on shipment volume, underscoring the absolute importance of the steel industry.

Amid the global steel industry crisis, the crisis in Pohang’s steel industry is expected to cause significant damage to key national related industries such as construction, automotive, shipbuilding, electrical, electronics, assembled metals, and general machinery, emphasizing the need for extraordinary support measures.

Although emergency recovery of steel-related companies and factories has been somewhat achieved, it is impossible to predict how long it will take to normalize and produce finished products. The city requested government support of about 1.4 trillion KRW for 27 practical tasks under three key agendas (▲Strengthening steel industry resilience ▲Promoting structural transformation of the steel industry ▲Leading new industrialization of the steel industry).

Mayor Lee said, “I appreciate the Ministry of Trade, Industry and Energy for understanding the seriousness of the steel industry crisis and promptly proceeding with the procedures for designating the Preemptive Response Area for Industrial Crisis,” and emphasized, “Early response is very important to prevent the expansion of the steel industry crisis, so please support the swift designation of the preemptive response area and early national budget allocation to ensure that the nation’s key industries remain stable.”

Pohang City plans to closely cooperate with the Ministry of Trade, Industry and Energy, related ministries, and Gyeongbuk Province, and work together with local lawmakers and the city council to promote projects for the preemptive response to the steel industry crisis.