According to Bussinesskorea, Dongkuk Steel, one of South Korea's leading steelmakers, announced that it will halt production at its Incheon plant, which produces 2.2 million tons of ribbed rebar annually at a single site, for about a month between July and August. This decision, the first in the company's 71-year history, was taken due to the decline in demand and cost increases in the construction industry.
The prolonged recession in the construction industry has caused demand for ribbed rebar to fall far below supply. In addition, the increase in industrial electricity tariffs in the summer and increasing raw material costs triggered the decision to stop production.
Dongkuk Steel had been gradually reducing production since the beginning of the year, keeping the plant utilization rate between 50-60%. The company anticipates a supply reduction of around 200 thousand tons between July 22 and August 15. With existing stocks, previously committed orders will be met without disruption.
Company officials said that they will re-evaluate market conditions in August and the production shutdown may be extended depending on demand.
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