Seoul: Hyundai Steel Co., South Korea's second-largest steelmaker by sales, announced on Monday the suspension of operations at its cold-rolled steel plant following a month-long strike by workers demanding wage increases. The stoppage affects the pickling line/tandem cold mill (PL/TCM) facility, a crucial component of the Dangjin integrated steel mill located about 80 kilometers southwest of Seoul.

According to Yonhap News Agency, the suspension of the PL/TCM facility, which is responsible for removing oil and rust from hot-rolled coil before converting it into cold-rolled steel products, has resulted in the immediate shutdown of the entire cold-rolled steel plant. A company spokesperson stated that the plant will remain non-operational until unionized workers at the Dangjin facility cease their strike and continue wage negotiations.

The halt in operations is expected to cause a production loss of at least 270,000 tons, valued at approximately 25.4 billion won (US$17 million). This "defensive measure" comes amid stalled wage negotiations that have been ongoing since late January.

The labor union has been pushing for a 159,800 won increase in basic pay, five months of salary in performance-based pay, and an 18 million won cash bonus for 2024. However, Hyundai Steel countered with a proposal for a 100,000 won pay increase, along with 4 1/2 months of salary and a 10 million won bonus. The proposed wage hike by the company is anticipated to lead to a 98 percent decrease in its annual net profit, dropping from approximately 443 billion won in 2023 to 8.81 billion won in 2024.

The ongoing wage dispute has affected Hyundai Steel's market performance, with its shares trading 2.46 percent lower at 25,800 won by 2:40 p.m., significantly underperforming compared to the broader Korea Stock Price Index (KOSPI), which experienced a 0.52 percent decline.