POSCO Protects Steel Industry Ecosystem Through Comprehensive Support for Suppliers, Partners, and Transporters

Concerns Over Sales Decline and Employment Instability
Priority Consumption of Domestic Suppliers' Inventory
Measures to Support Market Expansion Prepared

The first cold-rolled product produced at POSCO Pohang Steelworks' Cold Rolling Mill 1, which resumed operations on the 6th, is shown being coiled. Photo by POSCO

[Asia Economy Reporter Choi Seoyoon] POSCO announced on the 12th that it has prepared a comprehensive plan to support suppliers, partners, and transport companies that are expected to suffer damages during the restoration period of the Pohang Steelworks. Through this, POSCO aims to minimize damage to the steel industry ecosystem.

First, POSCO will identify and support the damage status such as sales decline, inventory increase, and liquidity deterioration of domestic suppliers delivering raw materials, equipment, and materials to the Pohang Steelworks.

To minimize the sales decline of suppliers, POSCO will promote deliveries through overseas subsidiaries such as POSCO Zhangjiagang Stainless Steel Co., Ltd. (PZSS) and support export and new market development through domestic trading companies like POSCO International. Additionally, overseas purchases will be reduced, and the increased demand for packaging materials due to the production increase at the Gwangyang Steelworks will be prioritized for orders from Pohang Steelworks suppliers.

For stainless steel scrap, which has been completely halted in receiving, the September order volume has been fixed at 50% of the average monthly volume, and the ordered quantity will be received until October when the yard for scrap storage is restored.

POSCO is also actively addressing concerns such as reduced work volume and employment instability of partner companies supporting steelworks operations. By consulting with partners, manpower and equipment are being maximally redirected to restoration work to minimize the impact on company operations, and plans to provide long-term, low-interest financial support for partner damage recovery are under consideration.

Furthermore, POSCO is making efforts for mutual growth with transport companies that deliver products from the Pohang Steelworks. Due to increased land transport volume from the production shift to the Gwangyang Steelworks, the decrease in shipments from Pohang Steelworks is offset, and shipment levels are expected to recover to normal by October. Prior to this, POSCO minimized the reduction in transport volume by promptly shipping inventory and transport company-stored products in consultation with customers.

Along with this, POSCO has prepared liquidity support measures such as implementing low-interest loans using 170.7 billion KRW, including 33.8 billion KRW from the Steel ESG Mutual Growth Fund and 136.9 billion KRW from the Mutual Growth Cooperation Special Fund.

Hot-rolled products are being produced at POSCO Pohang Steelworks' Hot Rolling Mill No. 1, which resumed operations on the 7th. Photo by POSCO

Meanwhile, POSCO completed the restoration of the 3rd Electrical Steel Sheet plant on the 15th of last month and the 2nd Electrical Steel Sheet plant on the 28th of the same month, and restarted the 1st Cold Rolling plant on the 6th of this month.

Notably, on the 7th, the restoration of the 1st Hot Rolling plant was completed, and it resumed operations. Hot-rolled products are sold directly but also serve as the base material for most products produced at the steelworks, such as cold-rolled, coated, and electrical steel sheets. POSCO advanced the originally planned mid-October completion date for the 1st Hot Rolling plant restoration, thus easing production constraints for downstream products.

Accordingly, customers can now order and receive hot-rolled, cold-rolled, and electrical steel sheet products from the Pohang Steelworks as usual, as before the flood damage. Some essential products still under production at the 2nd Hot Rolling plant and others undergoing restoration can be alternatively supplied from the Gwangyang Steelworks.

POSCO plans to progressively restore the 3rd Heavy Plate and 1st Wire Rod plants in October, the 2nd Heavy Plate and 3rd and 4th Wire Rod plants in November, and the 2nd Hot Rolling, 2nd Cold Rolling, 2nd Wire Rod, and Stainless Steel 2nd Cold Rolling plants in December. With the smooth progress of the Pohang Steelworks restoration, concerns about market supply and demand instability are expected to ease, and the recently surged distribution prices are likely to stabilize.

POSCO ensures that safety rules and procedures are strictly followed during the Pohang Steelworks restoration work, allowing the work to proceed calmly.

Choi Jeong-woo, Chairman of the POSCO Group, ordered, "Re-examine the work plan to prevent rushing due to the pressure for rapid restoration," and emphasized, "Personnel involved in the restoration must clearly recognize that 'all current site equipment is in an abnormal state' and calmly proceed with the restoration work."

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