To strengthen the competitiveness of the steel industry, the government has selected rebar as a key target for adjusting facility scale and will prepare support measures for companies that voluntarily reduce facilities above a certain size. It will also expand support for research and development (R&D) on special carbon steel and other future-oriented steels that are drawing attention.
In response to the spread of protectionism in various countries, including the United States' 50% tariff on steel, the government will set up emergency loan funds for corporations harmed by tariffs and strengthen oversight to prevent surplus volumes from each country from flowing into the domestic market.
On the 4th, at a ministers' meeting on strengthening industrial competitiveness presided over by Deputy Prime Minister and Minister of the Ministry of Economy and Finance Koo Yun-cheol, the government announced the "steel industry advancement plan."
Steel is a basic industry that underpins the competitiveness of key industries. It is an essential material for Korea's core industries, including not only construction but also automobiles and shipbuilding. It is also one of our main export items. Last year, steel exports totaled $33.3 billion, ranking sixth among export items.
Although it played a central role in Korea's rise as a manufacturing powerhouse, some say the industry has hit the limits of its competitiveness as it has entered a mature phase. With this situation compounded by global oversupply, industry conditions have surged to the worst levels on record.
From a global market perspective, excess steel supply gradually eased after 2016, but has recently worsened again. On top of that, demand has stagnated in traditional markets such as the United States, and strengthened protectionism has deteriorated export conditions. Domestically, with low-priced Chinese steel and other imports pouring in, demand-side corporations are showing a preference for cheaper foreign steel products.
In response, the government will first reduce domestic production of items without a technology gap by preemptively adjusting facility scale for oversupplied items. At the meeting, rebar, where corporations' voluntary facility adjustments have been limited and the penetration rate of imports (3%) is low, was selected as a key target for adjusting facility scale.
The government plans to prepare support measures for voluntary facility adjustments above a certain scale. In addition to tax support for corporations restructuring under the Corporate Vitality Act, it will also explore pushing for the enactment of a "special steel act" if necessary.
It will also accelerate the development of promising future technologies. Special carbon steel has been cited as a core focus area for technology development. The government will support R&D totaling 200 billion won for 10 types of special carbon steel by 2030. It will push to develop special carbon steel for use in extreme environments, including special carbon steel needed for LNG cargo holds.
It will also strengthen responses to unfair imports. With the United States, it will continue consultations to ease the burden of steel tariffs, and with the European Union, it plans to discuss steel tariff measures through official and unofficial bilateral consultations.
For corporations harmed by U.S. tariff policies, the government will set up 20 billion won in emergency loan funds and provide financing focused on corporations affected in steel, aluminum and derivatives.
It will also systematize responses to unfair imports by strengthening crackdowns on violations of country-of-origin labeling and investigations into anti-dumping duty evasion.
An official at the Ministry of Trade, Industry and Energy said, "The steel industry is currently at the initial stage of a structural crisis and in the golden time for a decisive, fundamental structural transition," adding, "We will reorganize around competitive steel grades based on supply-demand forecasts and strengthen high value-added and low-carbon competitiveness."