Hyundai Steel, South Korea’s top rebar producer, has suspended production at its Incheon and Pohang plants until the end of January due to a slump in the construction market, leading to declining demand and prices. Despite reducing operating rates last year, the company is now fully halting operations at key plants, as reported by Business Korea.
The rebar market faces significant challenges, with domestic demand hitting its lowest level since 2010. An industry official noted that the sluggish construction sector means the market is unlikely to improve soon, prompting manufacturers to cut production further to stabilize prices amid high exchange and electricity rates.
Dongkuk Steel, the second-largest producer, also plans further production cuts, reducing its operating rate to about 50pct this year, down from 65pct last year. Combined production from the eight major rebar manufacturers is expected to fall to 480,000 to 500,000 tons in January, less than 50pct of their 1 mln-ton monthly capacity.
Rebar prices, which peaked at KRW 970,000 (USD 657) per ton in early 2023, have recently dropped to the upper KRW 600,000 (USD 406) range, with inventory levels remaining high. To stabilize the market, manufacturers are adopting minimum pricing policies, refusing to sell below certain thresholds.
Since mid-December, Hyundai Steel and Dongkuk Steel have stopped selling rebar to distributors, a move not seen since the 2008 financial crisis, aiming to prevent low-price bulk purchases and resale at higher prices during peak seasons.
1 USD / 1,477 KRW
