Posco Cuts Stainless Steel Production by 100,000 Tons

South Korean steelmaker Posco says the economic downturn has hit the stainless steel market and it will cut production by 100,000 tonnes from September through the end of the year.

Flooding caused by a recent typhoon flooded the Pohang plant, and stainless steel production lines could not resume normal production until the end of December. However, since stainless steel products are highly corrosion resistant, most of the remaining work in progress and inventory can be used. This means that there will be no supply disruptions or price spikes in the market.

Domestic consumer demand is estimated at around 326,000 tons through the end of the year and market stocks are around 324,000 tons, with Posco holdings at 86,000 tons, the steel mill's official figures show. At the same time, Posco says it can guarantee the supply of 104,000 tons of products by alternative means.

In order to stabilize supply in the domestic market, Posco plans to redirect export materials to domestic consumption as much as possible by transferring slabs produced at the Pohang plant to the Gwangyang plant or Posco Zhangjiagang Steel in China for the production of hot-rolled steel, and the production of cold-rolled steel in Thailand to Posco -Thainox.

Posco also says it plans to partner with domestic and foreign stainless steel makers to supply some products that could be out of supply. It was decided to cooperate with local steel companies in the supply of stainless steel sheets, and in cooperation with foreign manufacturers, work is underway to produce stainless steel for automotive exhaust systems.