South Korean steel major POSCO’s Pohang Steel Works had witnessed multiple fire outbreaks recently, impacting operations at two of its factories. The incident happened soon after the landfall of typhoon Hinnamnore in Korea. Following the incident, there has been an increase in requests for supply to Japanese blast furnaces and trading companies not only from within South Korea, but also from South East Asia and remote markets, a Japan Metal Daily report said.
While blast furnace and steel plants at Pohang works will restart soon, there are concerns about damage to the electrical system of a wide range of rolling equipment, including thin plates, thick plates, and wire rods, that have been submerged.
POSCO has planned to supply semi-finished products such as slabs from its Pohang works and proceed alternative production at its Gwangyang works to ensure no disruption in supplies. However, since the recovery time of the rolling equipment is undecided, some South Korean rerollers and shipbuilding manufacturers are considering to increase imports of hot-rolled coils and plates from Japan, including insurance implications.
In addition, the company operates its electrical steel sheet production line only in Pohang, and cannot substitute production at Gwangyang Steel Works.
As per sources, the steel major has suspended new business negotiations for steel exports in order to assess the situation. In recent years, the export volume of electrical steel sheets from POSCO has been gradually declining, partly due to the increase in the production of electric vehicles by Hyundai Motors.
Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.
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