Dongkuk Steel Halts Incheon Plant Operations Amid Rising Electricity Costs and Decreased Demand
Dongkuk Steel has suspended operations at its Incheon Plant's electric arc furnace due to soaring electricity costs and declining demand, with production rates dropping to 50-60%. The company's rebar output fell from 2.16 million tons in 2021 to 1.5 million tons last year, and it plans to halt all production lines from December 22 to 31 amid rising manufacturing costs and low sales prices. The domestic steel industry is grappling with a 17% drop in rebar sales from 2022 to 2023 and a lack of government support.
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Dongkuk Steel has paused operations of its eco-friendly electric arc furnace at the Incheon Plant due to soaring electricity costs and declining demand. The plant's operation rate has dropped to 50-60%, down from 24/7 operations, as electricity expenses have risen significantly, from 105.48 KRW per kWh in 2021 to 180.6 KRW recently.
Production of rebar has decreased from 2.16 million tons in 2021 to 1.5 million tons last year, while electricity costs surged by 26.2% to 1.579 trillion KRW. To manage costs, the plant has shifted to operating at night when electricity is cheaper.
Dongkuk Steel plans to halt all production lines from December 22 to 31 due to increased manufacturing costs and low sales prices. The domestic steel industry is facing challenges, with rebar sales dropping by 17% from 2022 to 2023, compounded by a lack of government support.
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