Posted on 22 Nov 2024
South Korean steel giant POSCO has closed the No. 1 wire rod plant at its Pohang steelworks in the southeast of the Korean peninsula after 45 years and 9 months of operation, citing global oversupply of the rods and falling prices, Mysteel Global learned from the company's release on November 19.
As POSCO's first wire rod mill, the plant was supplied by UK plant builder Davy McKee (now part of Primetals Technologies Ltd) and began operation on February 28, 1979, producing wire rods used as materials for nails, screws, and high-strength tire reinforcements for automobiles. Initially the mill was a 27-stand, 2-strand mill with a rated capacity of 590,000 tonnes/year although it is unknown if subsequent modifications expanded the capacity.
During its lifetime, the mill produced a total of 28 million tonnes of wire rods, POSCO said.
Considering the steel glut worldwide, the influx of cheap overseas steel products, and the aging of the mill's facilities, POSCO made the decision to shut the plant down, it explained. POSCO estimates worldwide production capacity of wire rods in 2023 totalled 200 million tonnes while actual demand was only 90 million tonnes that year.
Chinese steelmakers reportedly host a combined wire rod capacity of 140 million t/y and have increased their exports in recent years, sources note.
POSCO plans to transfer the production of ultra-high strength tire cords and welding rods for use in shipbuilding and automobile production, previously manufactured at the No. 1 mill, to the remaining three wire rod mills at Pohang. As demand for cheaper wire rods in the domestic market has already been met by low-priced imports, the effect of the shutdown is expected to be limited, POSCO said in the release.
Looking ahead, POSCO aims to reduce the proportion of low-priced products and focus on high-value-added products, such as cold heading quality (CHQ) wire rods for automobiles, spring and bearing steel. This strategic shift intends to increase the steel major's profitability and competitiveness in the global steel market, it said.
Source:Mysteel Global
