According to Ajunews reporting on Saturday, POSCO has recently been reassigning workers from the No. 2 wire rod mill to other departments. The mill has operated with four shift teams, and two teams have already completed transfers, the report said. Industry officials expect operations at the mill could be suspended once the remaining reassignments are finished.
The No. 2 wire rod mill began operating in 1984 and has produced high-grade wire rod products. Wire rod is made by rolling semi-finished steel into coils and is used as an intermediate material for products such as steel wire, wire rope and welding rods.
Pohang Works once ran four wire rod mills. It started operating the No. 1 mill in 1979 and completed the No. 2 mill in 1984 to begin producing high-grade wire rod. As demand rose, it later built the No. 3 and No. 4 mills. Annual capacity is about 750,000 tons for No. 1, 547,000 tons for No. 2, 850,000 tons for No. 3 and 700,000 tons for No. 4.
The No. 1 mill was already closed in 2024 amid persistent oversupply in the global steel market. The latest move involving the No. 2 mill is being viewed in the same context, as structural oversupply in China has intensified price competition for commodity wire rod and demand has recovered more slowly than expected, squeezing profitability.
Domestic demand for wire rod has stayed below 3 million tons a year over the past three years, marking the lowest level since 2025. The Korea Iron & Steel Association said last year’s domestic wire rod production, exports and domestic sales were 2,136,615 tons, 613,020 tons and 1,467,031 tons, respectively, all down by as much as nearly 18% from a year earlier.
Over the same period, total domestic wire rod sales fell 16.7% to 2,080,051 tons, and domestic demand slipped 7.3% to 2,607,605 tons. Meanwhile, the market share of imported Chinese products rose to a record 34.3%.
The cutbacks at Pohang Works are not limited to wire rod. POSCO is also said to be reviewing a plan to remove a continuous caster at the No. 2 continuous casting plant. A continuous caster is a core steelmaking facility that continuously casts molten steel into semi-finished products such as slabs or billets.
Because most rolling processes — including wire rod, heavy plate and hot-rolled products — rely on output from continuous casters, reducing that equipment is seen as part of a broader effort to streamline the steel production system alongside wire rod cutbacks.
A POSCO official said the No. 2 wire rod mill has reduced its operating scale after reassigning workers from two of its four shift teams to other departments. But the official added that the company is lowering utilization and “does not have a plan to completely shut the plant for now.”
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.