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Affected by the continued weak demand for SA537 Class 1 steel construction steel in South Korea, Hyundai Steel has decided to suspend the threaded steel production line at its Incheon factory for one month starting from April 2025. The company stated that this move aims to alleviate market supply pressure and support local rebar prices through phased production cuts.
Hyundai Steel pointed out that the overall construction industry in South Korea is still in the early stages of recovery, with slow release of terminal orders. The company expects that steel demand is expected to gradually recover in the second half of this year, but it still needs to stabilize the market through supply side adjustments in the short term.
The annual SA537 Class 1 steel production capacity of the threaded steel production line at the Incheon factory is approximately 1.5 million tons. Data shows that the total sales of modern iron long products in 2024 will be 5.4 million tons, a decrease of 14.6% from 6.33 million tons in 2023. The company attributed the decline in sales to the slowdown in domestic construction investment and overall steel digestion speed.
According to data from the Korea Steel Association, the national production of rebar in South Korea will be 7.8 million tons in 2024, a year-on-year decrease of 17.8%; The total domestic sales volume was 7.62 million tons, a year-on-year decrease of 17.1%. Under the weak supply-demand situation, the price center is under pressure, and steel mills have gradually taken measures to reduce production and maintain prices.
A local trader in South Korea revealed that the current operating rate of the Incheon production line is about 60%, with unstable order rhythm and high inventory levels. Another industry insider confirmed that Hyundai Steel has arranged for the factory's rebar production line to be completely shut down in April.
In addition to the pressure on the demand side, modern iron manufacturing has also been affected by internal business adjustments recently. From late February to mid March this year, the pickling line and cold rolling mill of the company's Tangjin Steel Plant were temporarily shut down due to a union strike. To cope with overall business pressure, the company announced on March 14th a 20% reduction in executive salaries.
Hyundai Motor Group announced on March 21 that it plans to invest an additional $21 billion in the United States between 2025 and 2028. To meet the demand for automotive steel, Hyundai Steel plans to build a new steel plant with an annual output of 2.7 million tons in Louisiana. At present, its steel service center in Georgia can provide steel plates for 200000 vehicles, with plans to expand its capacity to supply 400000 vehicles annually.
The Elabel factory is the third complete vehicle factory invested and built by Hyundai Motor Group in the United States, the first two being the Alabama factory (with an annual output of 360000 vehicles) and the Kia factory in Georgia (with an annual output of 340000 vehicles). The group stated that with the completion of HMGMA, Hyundai has established a vehicle production system in the United States SA537 Class 1 steel with an annual capacity of 1 million vehicles. In 2024, the group's sales in the US market reached 1.71 million vehicles.
