Hyundai Steel Focuses on Long Products Like Rebar
Expected to Restructure Business Toward
High Value-Added Products Such as Automotive and Electrical Steel Sheets
Dongkuk Steel, With 80% of Revenue From Long Products
Likely to Graduall
The government’s announcement of plans to reduce facilities for general steel products such as rebar, as part of efforts to restructure the steel industry, has put Hyundai Steel and Dongkuk Steel on high alert. The prevailing view in the industry is that sweeping changes are now inevitable, as both companies fall within the scope of restructuring.
According to industry sources on November 4, Hyundai Steel held an internal meeting immediately after the Ministry of Trade, Industry and Energy unveiled its steel industry advancement plan. A company representative stated, “We are reviewing response measures in line with the government’s policy,” but it was reported that no final decision has been reached yet.
For Hyundai Steel, long products including rebar are considered core production items. The company has already been adjusting its operating rate and reducing output to cope with declining profitability and oversupply, but further restructuring has become unavoidable.
Dongkuk Steel is also facing the need to realign its business portfolio. Sales of long products, including rebar, account for 80% of the company’s total revenue. Previously, Dongkuk Steel halted operations at its Incheon plant-which has the nation’s largest rebar production capacity at 2.2 million tons per year-for a month in an attempt to cut output, but this proved insufficient. A Dongkuk Steel official said, “We are internally reviewing countermeasures in response to the new advancement plan,” but added, “It is difficult to announce any concrete actions at this time.”
Industry insiders expect Hyundai Steel to restructure its business around high-value-added products such as automotive steel sheets and electrical steel sheets, while Dongkuk Steel is projected to gradually increase its focus on sections to reduce its reliance on rebar.
In contrast, POSCO and SeAH Besteel are seen as largely unaffected by the direct impact of restructuring. POSCO has a low proportion of general products such as rebar and sections, and its production is centered on high-value-added products like electrical steel sheets, stainless steel, and premium automotive steel sheets. The company stated, “Since the new advancement plan targets general steel products, the direct impact on us is limited,” adding, “We will continue to consistently pursue our existing low-carbon, high-value-added strategy, including expanding electrical steel sheet production and carrying out hydrogen reduction steelmaking demonstration projects.”
SeAH Besteel is also expected to benefit from the policy, as it is transitioning its business structure toward specialty steel for defense and aerospace through its subsidiaries. The company recently began construction of a new high-strength aluminum plant for aircraft in Changnyeong and is expanding research and development investment in specialty carbon steel, moving in line with the government’s push for “preemptive investment items.”
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