South Korea unveils steps to support steel industry restructuring to overcome supply glut
The government will provide additional support to the steel industry for its much-needed transition to high-value and eco-friendly products, the industry ministry said on Tuesday, the latest effort to save the ailing sector facing global oversupply and escalating trade protectionism.
The road map aimed at boosting the competitiveness of the steel industry was unveiled at an economy-related ministers' meeting.
Under the plan, the government will support the steelmakers' preemptive measures to adjust the production capacity of items facing oversupply, such as structural steel and steel pipes, under the condition the companies make efforts for "responsible" management, according to the Ministry of Trade, Industry and Resources, reports Yonhap news agency.
In addition, the government will bolster its response to major economies' protectionist measures targeting the industry, such as the United States' 50 percent tariffs on all steel imports and the European Union's proposal for new steel safeguard measures.
While continuing negotiations over the protectionist measures, Korea will thoroughly execute the support package for exporters announced in September to minimise damage to local firms, the ministry said.
The government announced in September that it will provide up to 570 billion won (US$398 million) in emergency financial aid this year, including special low-interest loans and trade insurance, to tariff-hit steel and aluminum companies.
On top of the existing measures, the government will newly create a 400 billion-won guarantee program for steel exports and a 150 billion-won support program for derivatives of steel, aluminum and copper, according to the ministry.
The 400 billion-won fund will be jointly created by steelmaking giant POSCO Group, the Industrial Bank of Korea and the Korea Trade Insurance Corp.
To prevent the inflow of unfairly imported products, South Korea will require the submission of mill test certificates for any steel imports from next year and tighten regulations on circumvention dumping practices.
The ministry said it will also foster investment in future growth engines for the sector, such as special carbon steel, while supporting the industry's efforts to adopt artificial intelligence (AI) technology.
In detail, some 200 billion won will be funneled into supporting special carbon steel research and development projects.
Lastly, the government will promote the green transition of the steel industry, pushing forward with the country's plan to develop hydrogen-based steelmaking technology, the ministry added.
