According to information from the steel industry, the company informed employees during a labor management council meeting held at the Incheon facilities that both the steelmaking shop and the small rebar rolling mill would be shut down.
The closed facility accounted for nearly half of Incheons total rebar production capacity, with annual output estimated at around 1.6 million tons. The decision was taken approximately two weeks after production at the site was halted on the 4th of the month.
Rebar is mainly used in the construction sector. However, demand has seen a significant decrease due to the long standing weakness of the construction market in South Korea. Last year, total rebar demand in the country remained at around 7 million tons, while the domestic steel industrys total production capacity was calculated at 12.3 million tons.
The South Korean government, within the framework of its steel industry development plan announced on November 4 last year, identified rebar as one of the areas where structural improvements are inevitable and emphasized that facility level adjustments are necessary.
In line with these developments, Hyundai Steel had already suspended production at its Incheon facilities for one month in April last year. This time, however, the company decided on an indefinite closure. It was reported that no decision has yet been made regarding the sale of the facilitys equipment.
Meanwhile, it is stated that the closure decision wont lead to mandatory layoffs. During the closure of Pohang No 2 plant in June last year, the company followed a policy of preserving employment by reallocating workers to other units in line with discussions held with the union.
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