The company explains this decision by the global oversupply of steel

South Korean steelmaker POSCO will close its first steel wire rod plant (No. 1 Wire Rod Plant) at Pohang Steelworks after 45 years of operation. This is reported by Korea JoongAng Daily.

The company explains this step by the excessive global supply of steel products amid aggressive penetration of cheap foreign steel and aging production facilities.

The other three assets will be responsible for the future production of tire cords and welding rods for ships and cars. All employees of the plant to be closed will be transferred to other companies.

“The demand for cheaper steel wire rod in the domestic market is already being met by exporting it overseas at low prices, and the shutdown will have a limited effect,” said a POSCO spokesman.

The company’s closing facility began production in February 1979 and has produced a total of 28 million tons of wire rod since then.

According to Businesskorea, this is the second production shutdown for the South Korean steelmaker this year – in July, the company closed its No. 1 steel plant in Pohang.

Going forward, POSCO aims to reduce the share of low-cost products and focus on high value-added products, such as spring and bearing steel. This strategic change is aimed at increasing profitability and competitiveness in the global market.

POSCO and Indian company JSW Steel intend to jointly invest 650 billion rupees (about $7.73 billion) in the construction of a steel plant in the eastern Indian state of Odisha. The plant, with an initial capacity of 5 million tons of steel per year, will be part of their strategy in the country’s growing steel market.