POSCO, the world’s sixth-largest steelmaker, is expected to need months to resume full operations of its typhoon-hit plant, which makes up a quarter of South Korea’s steel production, a senior government official and industry sources said, even as the company restarted all of the three blast furnaces there.
Some other facilities such as rolling equipment, which Typhoon Hinnamnor hit hard, remained halted as restoration works are slow, according to POSCO officials.
POSCO also restarted some other equipment such as lines that remove impurities from molten iron produced from furnaces and adjust its ingredients for customer needs at the plant in the port city of Pohang, North Gyeongsang Province.
Many ground units stayed idle, however, including rolling facilities that process steel with heat and pressure as the entire plant was flooded with seawater due to the typhoon.
“We believe it will take up to six months to restore POSCO’s No. 2 hot rolled plant,” said Jang Young-jin, Vice Minister of Trade, Industry and Energy. “It is also expected to take a long time to reinstate other parts such as stainless facilities, although we need to check more on this.”
ONLY STEEL SLABS
The rolling facilities manufacture products such as hot rolled steel and cold rolled steel. Without them, POSCO is only able to produce steel slabs.
Reflecting investor concerns over those idled facilities, shares in POSCO Holdings Inc., the steelmaker’s holding company, tumbled 3.43% to 239,500 won ($172.1) on Seoul’s main stock market, far underperforming a 1.56% loss in the wider Kospi.
POSCO said the restoration work for the rolling units has made progress with the drainage of the facilities completed by some 90% although it was premature to set up further repair plans.
“It is predicted to take some time to restart the rolling process, but we will have to remove mud from the underground facilities to check the exact damage,” a company official said, declining to comment on Jang’s estimate of six months. POSCO officials including Group Chief Executive Choi Jeong-woo (without a safety vest) inspect an electric steel sheet plant at Pohang Steel Mill, which is under drainage and mud removal works, on Sept. 12, 2022 (Courtesy of POSCO) POSCO plans to send slabs for further processing to its own domestic steel mill in Gwangyang, which was not affected by the typhoon, and other companies in order to minimize the supply disruption of rolled steel products.
The measure will be insufficient, however, as the Pohang plant produced 16.9 million tons of crude steel last year, 44% of the company’s entire output and 24% of the country’s total production.
The steel mill manufactures 2.2 million tons of hot rolled steel, 2.9 million tons of cold steel, 3.4 million tons of plate and 2.7 million tons of wire rods annually.
Write to Kyung-Min Kang, Ik-Hwan Kim and Ji-Hoon Lee at kkm1026@hankyung.com Jongwoo Cheon edited this article.
