Seoul: Hyundai Steel Co., South Korea's second-biggest steelmaker by sales, announced the suspension of its cold-rolled steel plant following a protracted strike by workers demanding pay increases. The strike, which has lasted for a month, led to the halt of operations at the company's pickling line/tandem cold mill (PL/TCM) facility at its Dangjin integrated steel mill, located roughly 80 kilometers southwest of Seoul, as of 12 p.m. on Monday.
According to Yonhap News Agency, the PL/TCM facility plays a crucial role in the plant's operations by removing oil and rust from hot-rolled coil before processing it into cold-rolled steel products. The suspension has effectively brought the entire cold-rolled steel plant to a standstill. A company spokesperson emphasized that operations will not resume until unionized workers in Dangjin cease their strike, which they have been using as leverage in ongoing wage negotiations.
The suspension is expected to lead to a significant production loss of at least 270,000 tons, with an estimated value of 25.4 billion won (approximately US$17 million). This defensive measure by Hyundai Steel comes amid stalled wage talks with the labor union that have been ongoing since late January. The union has demanded a 159,800 won increase in basic pay, performance-based pay equivalent to five months of salary, and an 18 million won cash bonus for 2024.
Hyundai Steel has countered with a proposal of a 100,000 won pay increase, along with 4 1/2 months of salary and 10 million won in bonuses. The company has expressed concerns that its wage proposal would lead to a dramatic 98 percent decline in annual net profit, from approximately 443 billion won in 2023 to 8.81 billion won in 2024.
On the stock market, Hyundai Steel's shares fell by 2.08 percent to 25,900 won, underperforming the broader Korea Composite Stock Price Index (KOSPI), which experienced a 0.35 percent loss on Monday.