Dongkuk Steel to Suspend Rebar Production at Incheon Plant for One Month Starting in July

Triple Whammy of Oversupply, Sluggish Demand, and Rising Costs
Supply Expected to Be Limited by 200,000 Tons... Production Resumption Still Uncertain

Dongkuk Steel has decided to completely suspend operations at its Incheon plant, its main production base, in order to address the imbalance in the supply and demand of rebar.

On May 26, Dongkuk Steel announced that it will halt all processes at the Incheon plant for about one month between July and August. The Incheon plant is a key production hub, accounting for approximately 40% of Dongkuk Steel's total annual sales. It is equipped with two electric arc furnaces and two rolling lines. With an annual rebar production capacity of 2.2 million tons, it is the largest single rebar plant in South Korea.

Rebar is being produced at Dongkuk Steel's Incheon plant. Photo by Dongkuk Steel

This measure comes as the rebar industry faces three major challenges: weakened demand due to a slump in the construction sector, increased industrial electricity rates, and higher raw material costs. The company stated, "Unfavorable market prices below marginal cost have persisted," and explained, "If cutthroat competition among producers continues, it could have a negative impact on the industry as a whole. As the largest domestic producer, we have made a responsible decision."

As a result of this decision, rebar supply is expected to decrease by about 200,000 tons between July 22 and August 15. Dongkuk Steel plans to operate the Incheon plant at 50% capacity until next month and then gradually suspend production. However, the company intends to fulfill pre-contracted orders without disruption by utilizing its existing inventory.

A company official said, "After monitoring market conditions in August, if the oversupply continues, we will have no choice but to consider extending the suspension period," adding, "We have reached a point where we can no longer delay this decision."

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