[Alpha Biz= Kim Jisun] Amid a construction industry slump, major South Korean steelmakers have begun reducing production in January due to a sharp decline in rebar demand.

According to the steel industry on Sunday, Hyundai Steel’s Incheon No. 2 rebar plant will temporarily halt operations from January 13 to January 27. Similarly, the Pohang rebar plant will suspend operations from January 22 to January 31. Hyundai Steel’s Incheon small bar plant has already stopped production since January 9 and will remain closed until January 27.

Given that the Lunar New Year holiday starts on January 25 and extends effectively until February 2, the Incheon No. 2 rebar, small bar, and Pohang rebar plants are expected to resume operations on February 3.

Approximately 50–60% of Hyundai Steel’s rebar output is supplied to construction sites. The steel industry anticipates that Hyundai Steel’s temporary shutdowns will result in a production cut of about 70,000 tons in January.

The decision to cut production stems from a downturn in the construction sector, a key downstream industry. Demand for rebar reached record lows last year due to a slump in apartment construction, the primary market for rebar. Rebar distribution prices, a benchmark for market conditions, have also been falling steadily. With few apartment construction projects planned for this year, the rebar industry is expected to face prolonged challenges. Hyundai Steel plans to assess rebar inventory and pricing after the Lunar New Year holiday before deciding on further production halts.

Dongkuk Steel, South Korea’s second-largest rebar producer, also intends to cut production this year. After reducing rebar plant operations to night shifts, with a utilization rate of 65% last July, the company now plans to lower its production rate to approximately 50% in 2024.

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]