POSCO says normalization of typhoon-hit steel mill unlikely until Q1 2023

POSCO Holdings Inc., the holding company of South Korea’s largest steelmaker, expects its steel mill in the southern port city of Pohang flooded due to a super typhoon to return to normal operations in the first quarter of next year at the earliest.

Jang Young-jin, first vice trade and industry minister, said at a media briefing on Thursday that the government expects 13 out of 18 factories in Pohang to return to normal by the end of this year and the rest by the first quarter of next year, reaffirming its earlier stance that it will take at least six months before the affected plants return to full operations.

A POSCO official also said on Thursday: “It is only possible in the first quarter of next year to operate the remaining five factories, including the second hot-rolled mill, at the level seen before the typhoon.”

The POSCO official’s remarks are a reversal of the company’s position just a couple of weeks ago that normalization of its entire plants in Pohang would be possible by the end of this year.

POSCO, one of the world’s largest steelmakers, said in early September that it shut down all of its three furnaces at Pohang Steel Works for the first time in 49 years as many parts of the steel mill, including power lines, were flooded due to Typhoon Hinnamnor.

In mid-September, the company said it partially restarted its blast furnaces at its main plant in Pohang. It added that given the pace of its restoration work, it expects to return to normal operations by the end of the year, rebutting the government’s assessment of at least six months for restoration.

OVERLY OPTIMISTIC

At the time, industry watchers said POSCO was too optimistic and could be playing down its assessment of the situation, while some critics said the government was intervening too much in business matters when it vowed to hold POSCO executives accountable for the plant shutdown.

The industry ministry earlier said the plant shutdown could have been minimized if the company was adequately prepared. Some senior ministry officials also said POSCO intentionally highlighted the restarting of the furnaces while playing down the damage from the storm.

POSCO’s 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.

None of POSCO’s five furnaces in Gwangyang were affected by the typhoon.

POSCO Chairman and Chief Executive Choi Jeong-woo is expected to testify over the plant shutdown at a National Assembly session scheduled for Oct. 4.

Write to Kyung-Min Kang at Kkm1026@hankyung.com
In-Soo Nam edited this article.