On July 22, Dongkuk Steel's Incheon plant was operational again after experiencing its first-ever shutdown last year. The 120-ton electric furnace was actively producing molten steel, filling the workshop with intense heat as the electrodes melted scrap metal. While robotic arms measured the temperature of the molten steel, the glowing metal was transformed into semi-finished billets through the casting process. The plant appeared to have regained its vitality after a period of stagnation.
The Incheon plant serves as a key production base for Dongkuk Steel's future electric furnace technology. It features two electric furnaces and two rolling lines, with an annual production capacity of 2.2 million tons, accounting for 18.3% of the country's total rebar production capacity.
Last year, a downturn in the construction industry led to a significant drop in domestic rebar demand, prompting Dongkuk Steel to halt operations on some production lines at the Incheon plant for the first time in its history. The work schedule, which had been operating on a four-shift, three-team basis, was adjusted to a three-shift, two-team system, causing the plant's operating rate to plummet to 50%.
The revival of the plant was driven by the overseas market. To offset domestic sluggishness, Dongkuk Steel began expanding exports in late 2023, completing product certifications for Australia, New Zealand, Singapore, Hong Kong, and Japan. As a result, the plant's operating rate has recovered to around 70%, with the export share increasing from single digits to between 17% and 20%.
The key to this transformation is technology. The Incheon plant is equipped with the country's only eco-friendly, large-capacity shaft-type electric furnace, known as the ECO-ARC. This system recycles waste heat generated in the electric furnace to preheat the scrap metal for the next batch, significantly reducing electricity consumption and production costs.
While a conventional electric furnace requires about 400 kWh of electricity to produce one ton of molten steel, the ECO-ARC only needs approximately 260 kWh, achieving a 35% reduction in power usage.
Dongkuk Steel is also accelerating the development of the next-generation eco-friendly facility, the Hyper EAF, which aims to further enhance waste heat recovery and scrap preheating technologies to reduce electricity consumption and carbon emissions.
However, challenges remain. Although the plant's operating rate has improved due to increased exports, the ongoing steel industry downturn has left the first rolling mill, which produces rebar, still inactive. Additionally, the burden of high electricity costs complicates profitability. The Incheon plant incurs annual electricity expenses of up to 70 to 80 billion won, and the introduction of a regionally differentiated electricity pricing system could further increase costs for the plant located in the metropolitan area.
Lee Chan-hee, executive director of the Incheon plant, stated, "We aim to transform into an AI-based factory to enhance worker safety, cost efficiency, and quality competitiveness, making the Incheon plant the last electric furnace standing in the metropolitan area. However, maintaining competitiveness requires a reasonable electricity pricing system to support our efforts."
* This article has been translated by AI.
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