Seoul: The government has announced a strategic plan to bolster the struggling steel industry, focusing on its transition to high-value and eco-friendly products, as stated by the Ministry of Trade, Industry and Resources. This initiative is designed to address the challenges of global oversupply and escalating trade protectionism, as discussed during an economy-related ministers' meeting.
According to Yonhap News Agency, the government will assist steelmakers in proactively adjusting the production capacity for oversupplied items such as structural steel and steel pipes, contingent upon the companies' commitment to "responsible" management. Additionally, the government aims to counteract protectionist measures from major economies, including the United States' 50 percent tariffs on steel imports and new steel safeguard proposals from the European Union.
Continuing efforts to mitigate the impact of these protectionist measures, Korea will implement a previously announced support package for exporters to minimize damage to local firms. This includes up to 570 billion won (US$398 million) in emergency financial aid provided through special low-interest loans and trade insurance to support affected steel and aluminum companies.
Furthermore, the government will introduce a 400 billion-won guarantee program for steel exports and a 150 billion-won support program for derivatives of steel, aluminum, and copper. The guarantee fund will be established in collaboration with POSCO Group, the Industrial Bank of Korea, and the Korea Trade Insurance Corp.
To prevent unfair imports, South Korea will require mill test certificates for steel imports starting next year and will tighten regulations on circumvention dumping practices. The ministry also plans to foster investment in growth areas, such as special carbon steel, and support the industry's integration of artificial intelligence (AI) technology, with 200 billion won allocated for research and development in special carbon steel projects.
Lastly, the government will promote the steel industry's green transition by advancing the country's hydrogen-based steelmaking technology development plan, further emphasizing its commitment to sustainable industrial practices.