POSCO shuts down wire rod mill amid global oversupply and rising imports

South Korean steelmaker POSCO has decided to close its No. 1 wire rod plant at its Pohang Steel Plant, citing the ongoing supply glut in the global steel industry and competition from cheap imports. Located in Pohang, North Gyeongsang Province, the plant began operations on February 28, 1979, and produced a total of 28 million tons of wire rods.

Global wire rod production capacity reached 200 million tons in 2023, while demand was significantly lower at just 90 million tons. Chinese mills, holding a capacity of 140 million tons, have been exporting large volumes to neighboring countries due to weak domestic construction activity, driving down global prices. 

Wire rods, widely used in automotive manufacturing and construction, have faced mounting competition from low-cost imports, particularly from China and Japan. Earlier this year, POSCO temporarily halted operations at another steel mill in the Pohang complex due to similar pressures. 

The decision to close the mill also reflects the company’s strategic shift toward high-value-added products such as spring steel and bearing steel. POSCO aims to reduce its reliance on lower-margin products and focus on premium-grade materials to enhance profitability.