South Korean steel major POSCO has decided to halt operations at some of its plants amidst lack of space to store finished steel products which were not shipped due to truckers’ strikes who were asking for higher pay on surging fuel costs.
The steel producer has suspended its wire rod and cold-rolling mills from 7 am today due to inevitable reasons such as product warehouse staturation amid continuous suspension of land transport shipments. The estimated production loss stands at around 12,000 tonnes per day for wire rod and about 4,500 t per day for cold-rolled products, according to a SteelDaily report.
“Production at our Pohang steel plant is set for suspension, and we are not yet certain how long this suspension will last,” an official from POSCO said.
This decision came into effect post-the fourth round of meetings between the government and the Cargo Truckers Solidarity union to find out a certain ground and end the strike which began on 7 June.
The strike has resulted in increased concerns over global supply chain, which was already disrupted due to China’s strict Covid-19 curbs and Russia’s invasion of Ukraine. It is to be noted that, South Korea is a major supplier of semiconductors, smartphone, autos, batteries and electronics goods.
As ports worldwide struggle with supply bottlenecks, a slowdown in chip production, petrochemicals and autos threatens South Korea’s mainstay exports, and pushes up consumer inflation in Asia’s fourth-biggest economy to a 14-year high.
In addition, the truckers are demanding an extension to subsidies, set to expire this year, which guarantee minimum wage as fuel prices rise.
In response to the union, The Ministry of Land, Infrastructure and Transport explained “that ship owners, the party of interest, demand the abolition of the current Safe Trucking Freight Rates System.”
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