Hyundai Steel will shut down the small rebar plant at its Incheon works. The facility had accounted for half of the Incheon works' annual rebar output (about 1.6 million tons), and the decision comes about two weeks after operations were halted on the 4th.
According to the steel industry on the 20th, Hyundai Steel held a labor-management council meeting at the Incheon works that day and notified that it would close the steelmaking plant and the small bar rolling mill at the Incheon works.
Small-diameter rebar is used as a building material, but demand is weak as the construction market has slumped for years. Last year, total domestic demand for rebar was about 7 million tons (t), far below the domestic steel industry's production capacity of 12.3 million tons.
The government, in its "steel industry advancement plan" released on Nov. 4 last year, also designated rebar as a sector where structural improvements are unavoidable and said facility scale adjustments are needed.
Taking this situation into account, Hyundai Steel even halted production at the Incheon works for a month in April last year, but it ultimately decided on an indefinite shutdown this time. Whether to sell the equipment has not been decided, according to reports.
However, there appear to be no forced layoffs due to the suspension. When deciding to close the Pohang No. 2 works in June last year, Hyundai Steel also set a policy to maintain employment by reassigning idle personnel in consultation with the labor union.
A steel industry official said, "It appears to be a measure to respond to the continued decline in rebar demand due to the slowdown in the domestic construction market and to secure ongoing business competitiveness."