Hyundai Steel Pohang Shutdown Sparking Local Economic Downturn
Pohang, Gyeongbuk — Hyundai Steel’s decision to indefinitely shut down operations at its Pohang 2 plant has set off a chain reaction in the local economy. The reduced steel production, coupled with a decline in demand for construction steel, has created significant ripples across multiple sectors, including transportation, hospitality, and small businesses.
Factory Shutdown’s Immediate Impact
A recent visit to the factory site revealed an eerily quiet atmosphere. With the shutdown in full effect, both trailers and personnel have greatly diminished, reducing the local economic activity. Hyundai Steel officials cited lower demand and lack of profitability as reasons for the decrease in production.
Economic Fallout in Surrounding Areas
Taxi drivers and restaurant owners in the vicinity are deeply affected. Lee Sang-hong, a 63-year-old taxi driver, lamented, “We used to be busy with ride requests, but now even a 14-hour shift doesn’t guarantee enough fares.” Kim Hyun-ik, a restauranteur, added, “Just three years ago, our restaurant was bustling with reservation requests, but today, there are virtually no dinners,” highlighting the drastic change in the area’s economic footing.
Broader Industry Implications
Similar shutdowns by POSCO have added to the strain on the Pohang steel industry. While Hyundai Steel and Dongkuk Steel continue operations, smaller steelmakers face reduced activity, often managing only at 50-60% capacity. Industry insiders warn that the shake-up in the steel sector is severely impacting local business districts.
Historical Context and Future Implications
Hyundai Steel’s decision to lower production since December 2022 and the subsequent indefinite shutdown in June underscore deeper industry challenges. The shift towards low-profit products reflects declining global steel demand and price volatility that steel companies worldwide are grappling with. As large corporations like Hyundai Steel restructure, smaller players must navigate more turbulent economic waters.
Community and Support
Local businesses and residents are seeking ways to adapt and prosper despite these economic headwinds. Expert advice, industry reports, and community forums are emerging as resources for businesses to understand and respond to the ongoing issues.
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