South Korea’s largest steelmaker, POSCO Group, shut down one of its steel wire rod mills in the city of Pohang this week in response to rising global competition from Chinese producer, according to local reports. Steel wire rod is used to make a wide range of automotive components, including parts for suspension and steering systems, engines, seats, body and chassis. It is also a key material used by the construction sector.
The Unit 1 Wire Rod Mill at the company’s Pohang steel manufacturing complex had been in operation for 45 years and was the oldest of the company’s four wire rod mills. It produced 28 million tons of wire rod products since it was first opened in February 1979. Its closure will help the company rebalance supply with demand and improve profitability and efficiency, with production now concentrated at its three remaining, more modern facilities.
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A Posco official told reporters: “We’ve seen an influx of cheap foreign wire rod products in the domestic market, which has brought down market prices. Given such conditions and the competitiveness of the old facility, we’ve decided to reduce supplies of low-priced items.” The company had previously halted operations at one of its three steel mills in Pohang to help lift profitability.
