Hyundai Steel, the South Korea-based steel giant, has indefinitely shut down its No. 2 plant in Pohang, which plays an important role in steel section production. The company's decision has become inevitable in the face of deepening market difficulties and decreasing profitability.
According to the company's official announcement on June 11, the plant has suspended production since June 7 and the suspension will continue indefinitely. Management implemented the suspension after meetings with union members on June 9-10.
Two-shift temporary solution evolves into permanent closure
Hyundai Steel had prepared a similar closure plan in November last year, but due to the harsh reactions from the union, Hyundai Steel decided to continue with reduced production. However, as market conditions did not improve and cost pressures increased, this time the closure decision was implemented without delay.
In the statement made by the company, it was stated that the decision was taken in accordance with the production planning, "Due to structural challenges related to the workforce, it does not seem possible to establish a sustainable order for operations. Therefore, only the agreed suspension payment will be made," the statement read.
Machinery unit is also on the table
Not only Hyundai Steel's No. 2 plant, but also the machinery business unit operating at the No. 1 plant in Pohang is on the agenda. It is learned that negotiations are ongoing with Daejoo KC Group for the closure or transfer of this department, where parts such as excavator pallets are produced.
Shrinking production base, reshaping workforce
Last April, Hyundai Steel also temporarily halted rebar production at its Incheon plant and initiated a voluntary retirement process for technical staff in Pohang. With the closure of the No. 2 plant, a significant contraction in the company's steel profile production capacity is expected.
Hyundai Steel posted an operating loss of KRW 19 billion (about USD 13.7 million) in the first quarter of 2025. This marks the second consecutive quarter that the company has posted a loss.
Management and union representatives are scheduled to meet at the Pohang plant on June 12 (today) to discuss the details of the closure process.
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