Posted on 15 Jun 2022
A strike by unionized freight hauliers in South Korea has forced the country's leading steelmaker, POSCO, to halt several long- and flat-product mills at its Pohang works on the southwest coast of the Korean peninsula from June 13, taking an estimated 12,000 tonnes/day of finished steel out of operation, the company announced, as the works' warehouses are now full of undelivered steel.
The strike by the 22,000-strong union, Cargo Truckers Solidarity, is now in its eighth day and is causing major disruptions to cargo transportation nationwide. On Monday, the Ministry of Trade, Industry and Energy blamed the strike for already causing Won 1.6 trillion ($1.23 billion) in losses, with the steel, auto-manufacturing and petrochemicals industries reportedly being the hardest hit.
For the country's steelmakers, during just five working days last week – between June 7 and 12 – the strike cost them Won 697 million as they were unable to deliver an estimated 450,000 tonnes of finished steel to end-users, Korea's Yonhap news reported.
At its Pohang works, POSCO stopped all four wire rods mills and one of two cold-rolling mills as of 7am Monday as inventories of finished products totalling some 110,000 tonnes had completely exhausted the works' warehouse facilities, forcing the steelmaker to store steel items in vacant space near the mills and along the edges of access roads, it said.
The company warns that if the strike is not ended soon, operations on its hot strip and heavy plate mills could be impacted, and it might even be forced to idle upstream facilities as well. "If the situation is protracted, the operation of (blast) furnaces could be suspended," local daily Korea Times quotes a POSCO official as saying.
The truckers went on strike last Tuesday to protest at the government's refusal to extend the so-called "Safe Trucking Freight Rates System," implemented to guarantee minimum freight rates for truck drivers. The drivers, struggling to cope with rising fuel costs, decided to intensify their protest after failing to reach an agreement with the government last weekend.
With still no signs of an agreement, drivers have threatened to block the transportation of raw materials to POSCO, Hyundai Steel and Dongkuk Steel in Pohang, Korea Times reported. Although Hyundai Steel has yet to suspend operations at its works, deliveries of some 9,000 t/d of steel have reportedly been stopped.
The strike's knock-on effect for steelmakers is already evident. Just 55 kms south of the Pohang works is the sprawling Ulsan factory of the country's leading auto manufacturer, Hyundai Motor Group, a major buyer of POSCO's automotive sheet products.
Korean sources say the strike is delaying deliveries of crucial components to the carmaker, reportedly causing it to slash production to around 2,000 units per day, from the usual rate of 5,000-6,000 units daily.
Source:Mysteel Global
