POSCO, Making Every Effort to Stabilize Domestic Steel Supply and Demand

Comprehensive Survey and Detailed Inspection of Client Supply Status... Pohang Steelworks Aims to Resupply All Products Within 3 Months

Key Product Inventory Maintained at 2-3 Months, Low Risk of Steel Supply Disruption

Switching Production of Pohang-only Products Such as Wire Rods, Stainless Steel, and Electrical Steel Sheets to Gwangyang Steelworks

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seonsik] POSCO announced that it is making every effort to stabilize the domestic steel supply and demand, aiming to fully resume supply of all products from the Pohang Steelworks within three months.

Since the flooding of the Pohang Steelworks caused by Typhoon Hinnamnor on the 6th, POSCO has been focusing its capabilities on recovery work, fully normalizing the hot-rolling division on the 15th and accelerating the restoration of the rolling line, which suffered significant damage from the flooding of the Naengcheon stream.

POSCO aims for a phased restart: 1st Cold Rolling and 2nd Electrical Steel by the end of September; 1st Hot Rolling, 2nd and 3rd Heavy Plates, and 1st Wire Rod in October; 3rd and 4th Wire Rod and 2nd Cold Rolling in November; and Stainless Steel 2nd Cold Rolling and 2nd Hot Rolling plants in December.

The market views that inventories of key products such as hot-rolled steel, heavy plates, and stainless steel held by customers and distributors are at a 2-3 month level, indicating a low possibility of steel supply disruptions across the industry. However, POSCO is conducting a comprehensive survey and detailed inspection of customer supply situations to devise measures to minimize supply disruptions.

POSCO is also considering supply options such as switching production to the Gwangyang Steelworks and overseas subsidiaries, cooperating with other steelmakers, and importing via POSCO International if necessary. In particular, POSCO plans to actively support customers to avoid difficulties in material supply for wire rods, stainless steel, and electrical steel products produced exclusively at the Pohang Steelworks.

The Pohang Steelworks has a total of four wire rod plants, with the 1st Wire Rod plant expected to be restored in October, and the 3rd and 4th Wire Rod plants in November.

Currently, wire rod product inventory is known to be at an average of two months, so supply disruptions are not expected until October. For some urgent products, POSCO plans to utilize existing product inventory and produce them at the 1st Wire Rod plant, which will resume operation first, to minimize customer inconvenience. Some large-diameter products produced only at the 2nd Wire Rod plant will have supply stabilization pursued through strategic cooperation with other steelworks.

For stainless steel products, current inventory is about five months, indicating sufficient supply.

POSCO plans to consider domestic supply using overseas production subsidiaries such as POSCO Zhangjiagang Stainless Steel Co., Ltd. in China and POSCO-Thainox in Thailand if necessary.

In particular, POSCO has been promoting a dual production system since the end of last year, transporting stainless steel slabs produced at the Pohang Steelworks to Gwangyang to produce stainless steel hot-rolled and cold-rolled products, and plans to accelerate this.

Inventories of grain-oriented electrical steel (GO) products used in transformers and non-oriented electrical steel (NO) products used in electric vehicle drive motors and home appliance motors are at a 2-3 month level.

Additionally, the 3rd Electrical Steel plant has already started operation, and the 2nd Electrical Steel plant, which began trial operation on the 17th, is expected to start full operation by the end of September, enabling it to meet most domestic demand.

For some high-efficiency non-oriented electrical steel (Hyper NO) products for automobiles, POSCO is discussing with customers the switching of production to the hot-rolling plant at Gwangyang Steelworks and certification procedures to ensure smooth supply.

BP products (a type of cold-rolled product), which are raw materials for coated steel sheets, are also produced at the Pohang Steelworks.

Among these, BP for battery cases is expected to have a three-month inventory, and shipments will be possible from the end of October when the 1st Hot Rolling plant, the upstream process, is restored, so there is no immediate impact on supply.

POSCO is proactively reviewing switching production and certification at the Gwangyang Steelworks to prevent unforeseen situations, considering customers and the electric vehicle industry.

For hot-rolled, heavy plate, and cold-rolled products commonly produced at both Gwangyang and Pohang Steelworks, supply impact is expected to be limited considering the maximum production system at Gwangyang Steelworks through adjustment of repair schedules for the 3rd Hot Rolling plant and current inventory levels.

In particular, for heavy plates used in shipbuilding, which some have expressed concern about, general products can be sufficiently produced at the Gwangyang Steelworks. Heat-treated and thin (less than 10mm thick) products mainly produced at the Pohang Steelworks are planned to be supplied through switching production at Gwangyang Steelworks and alternative supply from Indonesia’s PT.KRAKATAU POSCO.

Automotive steel sheets are mostly produced at the Gwangyang Steelworks, so the impact on customer operations is expected to be minimal.

Meanwhile, China, which has a significant influence on the global steel market, is experiencing little fluctuation in steel prices due to demand slowdown. Contrary to some concerns, the flood recovery at the Pohang Steelworks is progressing smoothly, so domestic steel prices are also expected to remain stable.

POSCO is carrying out the Pohang Steelworks recovery work as planned, communicating closely with customers on a daily basis, and responding stably to domestic demand. Through this, POSCO aims to alleviate customer supply disruption concerns and minimize the burden on the domestic steel industry.

Asia Economy Honam Reporting Headquarters, Reporter Heo Seonsik hss79@asiae.co.k

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