Second Shutdown This Year... POSCO Pohang Steelworks Closes 1st Steelmaking and 1st Rolling Mill

Production and Sales Restructuring Focused on High Value-Added Products Planned

POSCO Pohang Steelworks' 1st Wire Rod Plant has announced on the 19th that it has entered a shut down after 45 years and 9 months of operation.

POSCO Pohang Steelworks' No. 1 Wire Rod Mill produced its final wire rod product on the 19th and ceased operations.

This closure of the 1st Wire Rod Plant is the second shut down following the Pohang 1st Steelmaking Plant in July.

POSCO recently decided to permanently close the 1st Wire Rod Plant after comprehensively considering the ongoing global steel oversupply, the onslaught of low-priced imported steel products, and aging facilities.

In 2023, the global wire rod market had a production capacity of about 200 million tons, but actual demand was only 90 million tons.

For example, China’s wire rod mills have a production capacity of approximately 140 million tons, but due to weak domestic construction demand, they have exported at low prices to neighboring countries to maintain operating rates, leading the global wire rod price decline.

In Korea, the continuous import of such low-priced foreign wire rod products has also caused domestic market prices to fall.

Considering these market conditions, POSCO decided to optimize the 1st Wire Rod Plant by reducing supply to the price-centered low-cost product market, which is unrelated to quality, taking into account the competitiveness of aging facilities and decreased demand.

The Pohang 1st Wire Rod Plant began operations on February 28, 1979, and after two rounds of rationalization, produced a cumulative total of 28 million tons of wire rod products over 45 years.

The wire rod products produced at the 1st Wire Rod Plant have been used as materials for nails and screws, as well as high-strength tire reinforcements such as tire cords and bead wires for automobiles.

POSCO plans to transfer the production of high-strength tire cords, welding rods for ships and automobiles, and other steel products previously produced at the 1st Wire Rod Plant to the Pohang 2nd to 4th Wire Rod Plants, and all employees of the 1st Wire Rod Plant will be reassigned within the division or to other departments after the plant is closed by the end of November.

The domestic low-priced product market has already been reorganized into a market centered on low-priced imported products, so the market impact from adjusting these facilities is expected to be limited.

Therefore, POSCO plans to reduce the share of the price-centered competitive low-cost product market and focus its capabilities on high value-added products such as automotive high-strength bolts (CHQ), spring steel, and bearing steel, while reorganizing wire rod production and sales.