Seoul: The government has designated Seosan and Pohang as special crisis-response zones to address the challenges faced by South Korea's petrochemical and steel sectors due to global oversupply, as announced by the industry ministry on Thursday.
According to Yonhap News Agency, Seosan was selected for its significant role in housing one of the nation's three major petrochemical industrial complexes, located approximately 120 kilometers south of Seoul. Meanwhile, Pohang was chosen due to its heavy reliance on the struggling steel industry, situated about 370 kilometers southeast of Seoul, as reported by the Ministry of Trade, Industry and Energy.
The special designation for these two cities will last for the next two years, allowing local companies to access emergency liquidity support and low-interest policy loan programs. This move follows the government's recent initiative to encourage "voluntary" restructuring efforts within the petrochemical industry, prompted by concerns over the sector's survival amidst declining global demand and the influx of Chinese products.
In May, the southwestern city of Yeosu, another key site for a petrochemical industrial complex, was also designated as a special zone. The Korean steel sector has been particularly affected by the United States' imposition of 50 percent tariffs on imported steel products, exacerbating the impact of global oversupply in recent years.
Data from the Korea International Trade Association revealed that South Korea's steel exports to the U.S. dropped by 26 percent in July compared to the previous year, totaling US$283 million due to tariff repercussions. The ministry has indicated plans to introduce further measures aimed at enhancing industrial competitiveness, including financial support for research and development projects.