Steel industry faces slump

[Anchor]

Our steel and petrochemical industries, already struggling due to China, are now facing the added risk of Trump.

In particular, the steel industry is focusing on survival as it deals with the domestic construction market slump.

Reporter Jeong Jae-woo has the story.

[Report]

The headquarters of Hyundai Steel, with an annual revenue of 22 trillion won, is located at the Incheon plant.

As the number one rebar producer in the country, it has an annual production capacity of 1.3 million tons of rebar, but starting today (1.13), it has decided to halt operations.

This rebar plant will stop operations for about 20 days until early next month, ceasing rebar production.

[Steel industry official/voice altered: "If we produce, inventory builds up, and when inventory accumulates to an unmanageable level, we have no choice but to sell below cost, which can lead to a vicious cycle..."]

Next door is Dongkuk Steel, the second-largest rebar producer.

Since last July, it has been operating only at night, reducing its operating rate to around 60%.

Nearby businesses are also feeling the freeze.

[Nearby restaurant owner/voice altered: "It seems that the number of customers coming from Dongkuk Steel or Hyundai Steel has definitely decreased. It has decreased enough to impact sales."]

The steel industry has resorted to temporary shutdowns to reduce production due to significantly decreased demand.

The construction industry's ongoing slump, which used to purchase more than half of the total rebar production, has continued, and cheaper Chinese steel, which is 10-20% less expensive than domestic steel, has flooded the market.

Last year alone, domestic steel demand dropped by over 10%, leading to a production cut of about 6%, but that was still insufficient.

POSCO closed two plants last year alone.

Companies are seeking overseas markets while also calling for the introduction of non-tariff barriers to curb the export of Chinese steel.

[Lee Jae-yoon/Director of Carbon Neutral Industry Transition Research at the Korea Institute for Industrial Economics and Trade: "(When importing) we can require information such as the producer of the steel products and the amount of CO2 generated during production, which could create a burden for exporters overseas..."]

Next week, with the Trump administration promising a 60% universal tariff on China, the steel industry is concerned that China may engage in even more aggressive dumping of products.

This is KBS News, Jeong Jae-woo.