The government stepped in for relief as the industry undergoes stringent cost-saving streamlining to survive a global glut, a protectionist environment and the U.S. 50-percent tariff on steel imports.
On Monday, it warned of antidumping duties of up to 33.43 percent on steel imports after a yearlong investigation.
The Korea Trade Commission (KTC), which operates under the Ministry of Trade, Industry and Energy, recommended a set of penalty duties to the Minister of Economy and Finance for final approval. The tariffs, ranging from 28.16 percent to 33.43 percent depending on the exporter, will replace provisional duties that have been in force since September 2025.
It will hear counterclaims from nine exporters — three Japanese and six Chinese firms — that together accounted for about 81 percent of South Korea's total hot-rolled steel imports over the past three years.
Focus on hot-rolled coils
The judgment centers on hot-rolled coils (HRC), the foundational building block of the modern steel supply chain.
Because HRC is a commodity-grade material with minimal technical differentiation, pricing is the dominant factor in purchasing decisions, making it especially vulnerable to low-cost import competition.
Sector downturn deepens
The antidumping action comes as South Korea's broader steel sector grapples with its worst downturn in years.
Domestic reinforcement bar (rebar) consumption plunged to a 25-year low in 2025, dragged down by a prolonged slump in the construction industry, according to the Korea Iron & Steel Association.
Rebar usage shrank 14.4 percent year on year to 6.66 million tons, the lowest since the association began tracking the data in 2000.
Local steelmakers, strained by Chinese oversupply, slowing domestic demand and U.S. tariffs, have resorted to restructuring to survive.
Hyundai Steel has decided to permanently shut down one production line at its Incheon rebar plant, while Dongkuk Steel halted production at its own Incheon facility due to similar overproduction issues.
Earnings under pressure
End-year results show that the financial toll has been stark.
Dongkuk Steel's full-year 2025 operating profit tumbled 42.1 percent to 59.4 billion won on revenue of 3.2 trillion won. POSCO Holdings saw consolidated operating profit drop 16 percent to 1.83 trillion won as revenue slipped 5 percent to 69.1 trillion won.
However, the company posted an earnings shock in the fourth quarter, with revenue of 5.5 trillion won and operating profit of 43.3 billion won, plunging 53.6 percent from the previous quarter and sharply missing market expectations.
Price gap narrows
The root of the trade remedy lies in a widening price gap.
Japanese and Chinese HRC was sold in the Korean market at an average of about 708,000 won per ton in July 2025, roughly 12.8 percent cheaper than comparable domestic products priced at 812,000 won.
After stripping out tariffs and logistics costs, exporters' home-market prices were estimated to be 15 to 20 percent below Korean mills' prices.
Provisional duties took effect in September 2025, narrowing the price differential to about 5 percent and resulting in import decline.
The government projected that domestic HRC shipments could rise by more than 1 million tons, lifting local producers' market share by about 8.9 percentage points.
"The steel tariffs were already imposed during Trump's first term under Section 232 of the Trade Expansion Act, which allows the president to impose duties on national security grounds, so the impact is limited," said Park Sung-bong, an analyst at Hana Securities.
"The Trump administration is reportedly reviewing a reduction in tariffs on derivative products containing steel and aluminum. If this materializes, exports of those products to the U.S. could recover, which is expected to have a partially positive effect on domestic steel demand."
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