The domestic steel industry has faced a structural crisis, prompting the government to embark on a major industrial restructuring. The plan aims to transform the steel industry’s structure through ‘Steel Industry Advancement Measures’ focused on alleviating oversupply, improving export conditions, and transitioning to low-carbon processes.
On the 4th, the Ministry of Trade, Industry, and Energy (Minister Kim Jung-kwan) confirmed and announced the ‘Steel Industry Advancement Measures’ in the joint economic relations ministers’ meeting and industrial competitiveness enhancement relations ministers’ meeting. The government has defined these measures as “a turning point for industrial structure transformation to secure both the survival and future competitiveness of the steel industry.”
The steel industry, often referred to as the ‘rice of industries’, has been fundamental to the competitiveness of domestic manufacturing. However, its competitiveness has been shaken by complex factors such as global oversupply, pressure to reduce carbon, and investment curtailment due to high interest rates. The government has publicly committed to preemptively adjusting the industrial structure, stating that “it is no longer viable to maintain the industry through competition centered on universal goods.”
The government plans to adjust the scale of facilities, focusing on products with oversupply. For items where market-driven adjustments are difficult, institutional support will be combined to induce restructuring. For less competitive items like shaped steel and pipes, support for adjustment will be considered based on responsible management and employment maintenance by companies, while initiatives for voluntary business restructuring conditions will be set for items like reinforcing bars, which have lower penetration of imported goods. On the other hand, priority will be given to responding to imported goods for items like hot-rolled, cold-rolled, and galvanized steel sheets, which have a high share of imports.
The government will also commence establishing systems, including providing tax incentives through the ‘Act on the Promotion of Industrial Vitality’ and considering the enactment of a ‘Special Act on Steel’, if necessary. An official from the Ministry of Industry stated, “While market autonomy should be guaranteed, adjustments for less competitive items are unavoidable,” explaining that these decisions are made to ensure the sustainability of the whole industry.
Support for export companies and responses to trade issues will be strengthened. To address the U.S.’s 50% tariff imposition and the EU’s safeguard measures, bilateral consultations will be expanded, and financial support measures will be provided to resolve export difficulties faced by domestic companies. A 400 billion won ‘Steel Export Supply Chain Reinforcement Guarantee Product’ and a 150 billion won ‘Interest Subvention Program for Steel, Aluminum, and Copper Derivatives’ will be newly established.
A cooperative system among the Korea Customs Service, Ministry of Industry, and Korea Iron & Steel Association will also be established to regulate unfair import goods. The government plans to fully implement the mandatory certification of steel product quality from 2026 and aims to prevent anti-dumping evasion through customs law amendments to block indirect imports and the use of bonded areas.
The government plans to cultivate special carbon steel as a growth axis for the next generation. As an essential material for advanced industries such as semiconductors, batteries, and aerospace, special carbon steel is selected as one of the 15 major projects for ultra-innovative economics. A research and development investment of 200 billion won will be promoted, and growth foundations, including tax support, will be established.
The Ministry of Industry is planning to aid the domestic performance achievement of high-value steel products by reflecting the use of high-quality steel products in the bidding and specifications of major projects such as infrastructure and construction. Public projects that can promote steel consumption will be pursued in collaboration with related ministries, such as the Ministry of Land, Infrastructure, and Transport.
The core of this plan is ‘hydrogen reduction steelmaking’. The government is advancing the ‘Korean Hydrogen Reduction Steelmaking Demonstration Project’, valued at 810 billion won, after passing the preliminary feasibility study in June this year, without any setbacks. The Ministry of Industry stated, “Stable procurement of clean hydrogen is necessary for the realization of hydrogen reduction steelmaking,” and plans to establish an incentive system for securing economically viable clean hydrogen.
AI transition will also proceed simultaneously. The government plans to implement ‘Manufacturing AI Transformation’ by applying artificial intelligence throughout the manufacturing processes of the steel industry. Through the expansion of AI factories and AI solutions, the aim is to enhance process efficiency and safety and develop specialized AI models for the steel industry to establish a foundation for smart manufacturing.
Joint measures are also prepared to minimize the impact on local economies and employment during the industrial restructuring process. The government is considering designating regions heavily dependent on the steel industry as ‘Regions of Industrial Crisis Response Preemption’, with plans to accompany these with employment stability and regional industry diversification support measures.
Measures to ensure public safety and quality through reinforced management of non-KS (Korean Industrial Standards) materials will also be enhanced. The government plans to promote the settlement of the KS certification system in the market and expand post-management and factory inspections to prevent the inflow of substandard steel materials.
The government appraised this plan as “a turning point for a new leap forward in the steel industry.” Kim Jung-kwan, Minister of Trade, Industry, and Energy, stated, “The steel industry is now not merely a production industry but a key axis of national carbon neutrality and manufacturing innovation.” He emphasized, “Through industrial advancement centered on AI, hydrogen, and specialty steel, we will reestablish global competitiveness.”