Posted on 16 Jun 2022
The truck drivers' strike that paralysed deliveries of goods in South Korea including those of finished steel for the past week is over, though how quickly the backlogs will be cleared remains unknown. The Korean government had estimated the major disruptions the truckers' action had caused at least Won 1.6 trillion won ($1.23 billion) in damages of the steel, automobile and petrochemical sectors, as Mysteel Global reported.
Late on Tuesday, representatives of the 22,000-strong Cargo Truckers Solidarity, part of the Korean Confederation of Trade Unions, announced they had reached an agreement with the government and had decided to return to work from Wednesday, according to Korea's Yonhap newsagency.
The strike had forced the country's largest steelmaker, POSCO, to halt all four wire rods mills and one of two cold-rolling mills at its Pohang works in the country's southwest from Monday as inventories of finished products totalling some 110,000 tonnes had filled the works' warehouse facilities, as reported.
The truckers had been protesting at the government's intention to phase out the so-called "Safe Trucking Freight Rates System," a scheme introduced in 2020 that guaranteed minimum freight rates for truck drivers carrying containers and cement and which was scheduled to end on December 31.
Yonhap says the truckers' union and the transport ministry had agreed to keep the system in place, and would consider expanding the system's application to other cargo items and review an idea of increasing fuel subsidies for cargo truckers.
POSCO will be relieved that deliveries from its works will resume, as the mill had hinted that a protracted strike might force it to idle a blast furnace – a tough decision to make, as a Korea Iron & Steel Association study had indicated a three-month suspension of a blast furnace would deliver a Won 800 billion ($622 million) hit to the company's revenue.
The issue now will be how quickly Korean industry can recover from the strike. Other Korean reports noted that the strike had slashed average shipments of about 74,000 tonnes/day of petrochemical products by 90%.
The Korea Herald also quoted an association representative of the country's eight cement firms as saying that several cement kilns were stopped because of the strike and that makers will need a week – and spend up to Won 300 million – to restart their operations.
"It is impossible for manufacturers to just stack cement powder up in open spaces," the official had explained.
Source:Mysteel Global
