Typhoon Xuan Lan Nuo passed through South Korea on Tuesday (6th), and a fire broke out in many factories at the Pohang City, Gyeongsangbuk-do, South Korea’s heavyweight steel factory Pohang Steel (POSC) on Tuesday morning, and three blast furnaces were closed one following another. Losses may be as high as 50 billionwon (regardingTaiwan dollar 1.1 billion or more).
Posco Steel (005490-KR) shut down two blast furnaces at the Posco plant due to the typhoon, however, the third blast furnace at the Posco plant was eventually suspended due to power outages as flood damage was much higher than expected.
At the same time, the Pohang factory also suffered a number of fires. “The fire started at around 7:30 a.m. and has now been fully extinguished,” a POSCO spokesman said on Tuesday. “Due to the power outage caused by the typhoon, there was a by-product gas leak from the factory in the morning.”
Founded in 1968, Posco Steel, the world’s sixth largest steel maker, has an annual production capacity of more than 30 million tons of crude steel, and the Posco plant produces 15 million tons of molten iron annually.Posco’s plant accounted for 45% of Posco’s total sales last year, with daily sales of regarding 50 billion yuanwon。
Industry experts estimate that Posco will lose regarding 50 billion yuan a day due to the shutdown of three blast furnaces at the Posco plantwon (regardingTaiwan dollar 1.1 billion or more). In addition, the existing products and materials in the Posco plant were turned into scrap iron due to the flood, so the losses are expected to expand further.
Industry experts believe the biggest problem right now is that it’s impossible to predict exactly when to restart plant equipmentAt present, most areas of the Posco plant are flooded, so it is difficult to judge the damage to the facilities. Posco must know the extent of the damage to the equipment before it can know the restart time.
Hyundai Steel (004020-KR) was also affected by Typhoon Xuan Lannuo and suspended the operation of its Pohang plant, but Hyundai Steel’s Dangjin and Incheon plants can increase production to make up for production capacity, and the current business impact is not great.
Will there be a chain reaction to the Pohang Steel fire case? China Steel (2002-TW) Chairman Weng Chaodong said in an interview that the preliminary assessment of the current situation of Posco Steel is very serious, and the upward speed of steel prices will accelerate.