POSCO to Restart Wuhan Auto Steel Processing Center by End of March

[Asia Economy Reporter Hwang Yoon-joo] POSCO Automotive Steel Sheet Processing Center (POSCO-CWPC) in Wuhan, Hubei Province, China, which had suspended operations due to the novel coronavirus infection (COVID-19), will resume operations at the end of this month.

According to POSCO on the 13th, the Wuhan processing center received approval from the Chinese government to resume operations. Factories approved to resume operations must undergo subsequent quarantine-related procedures and obtain final approval. Accordingly, the Wuhan processing center is expected to restart its equipment as early as the end of March.

Previously, the Chinese central government extended the Lunar New Year holiday (January 24-30) by three days to prevent the spread of COVID-19 and allowed local governments such as Hubei Province, where the situation was severe, to further extend the holiday. During this period, most manufacturing plants in China, including automobile and semiconductor factories, suspended operations.

Since February 10, most factories in China have resumed operations, but Hubei Province, the epicenter of COVID-19 infections, postponed the resumption of operations again and decided to monitor the situation. Currently, POSCO continues to pay local employees their wages normally even during the suspension period.

POSCO Wuhan Processing Center began operations in January 2015 and mainly produces automotive steel sheets. Its annual production capacity is 170,000 tons, which is about 1.8% of POSCO's annual automotive steel sheet production capacity (9 million tons). However, since it is a region where global automobile manufacturers compete, the significance represented by the Wuhan processing center is by no means small.

Although the factory will resume operations, the issue is the speed of recovery. The steel industry (POSCO Wuhan Processing Center) is a downstream industry and is affected by the production volume of automobile manufacturers. Moreover, the Wuhan lockdown has not yet been lifted, and since Koreans entering the area must undergo quarantine measures, expatriates have not yet returned.

An industry official explained, "Whether expatriates from POSCO, SK General Chemicals, and others in Wuhan can leave depends on the lifting of the Wuhan lockdown," adding, "Even if the factory restarts, it is expected to take time to return to normal."

This content was produced with the assistance of AI translation services.