According to international media reports on September 19, 2023, Hyundai Steel Co., a South Korean company, has decided to close its stainless steel steelmaking plant located in Incheon, South Korea.
Due to the proliferation of Chinese products, sales of its affiliate companies and major customers, Hyundai Motor Co. and Kia Corp., have declined, leading Hyundai Steel to exit the market.
Industry sources revealed on Wednesday that the steel manufacturer recently informed its labor union of this decision. After closing the Incheon plant by the end of this year, the company will transfer the employees of the Incheon plant to other facilities.
Since transferring its stainless steel sales rights to a subsidiary in January of last year, Hyundai Steel has been selling stainless steel through its subsidiary, Hyundai BNG Steel Co.
Stainless steel is known for its resistance to corrosion and rust, making it suitable for a wide range of applications, including everyday items, automobiles, aircraft, and construction.
However, Hyundai BNG has decided to stop selling stainless steel manufactured by Hyundai Steel.
An official from Hyundai Steel stated, "We received notification from Hyundai BNG Steel Co. that they will not take orders for stainless steel after September."
"Because we have no other sales channels, we have decided to stop producing stainless steel. Instead, we will focus more on high-end products such as automotive steel plates."
Hyundai BNG operates its own stainless steel manufacturing plant in Changwon, South Gyeongsang Province.
This move by Hyundai Steel comes as part of its downsizing of operations in China.
Last month, Hyundai Motor Group's steelmaking division signed a memorandum of understanding to sell its Chinese subsidiary in Chongqing to an undisclosed local company, following its decision to sell its subsidiary in Beijing.
Incheon Factory of Hyundai Steel produced 100,000 tons of stainless steel last year, half of its annual production capacity.
The factory, built in 1990, once produced 200,000 tons and achieved a historical high annual sales of 300 billion Korean won (approximately 226 million US dollars).
In 2016, China decided to restrict imports from South Korea in retaliation for the deployment of the US Terminal High-Altitude Area Defense (THAAD) system in Seoul, which heavily impacted major customers and affiliate companies, Hyundai Motor and Kia.
Despite cumulative losses in its Chinese factories, Hyundai Steel saw its operating profit increase by 57% in 2022, reaching 100 billion Korean won, and its sales increased by 40% compared to the previous year, reaching 46.1 billion Korean won.
Comments