Backdrop & Context
The closure of POSCO's Wire Rod Plant No. 1 in Pohangrepresents more than just the shuttering of an industrial facility, itsymbolizes a profound shift in South Korea's economic landscape. Since itsfounding in 1968, POSCO has stood as a cornerstone of South Korea's miraculouseconomic transformation, evolving from a war-torn nation to a global industrialpowerhouse. The company's development paralleled the country's own economicmiracle, with steel production serving as the backbone for subsequent growth inshipbuilding, automotive manufacturing, and electronics.
Pohang itself emerged as a quintessential "steelcity," its identity and economy inextricably linked to POSCO's operations.From a sleepy fishing village, it transformed into an industrial center wheregenerations of workers built their lives around the company's steady employmentand the economic ecosystem it supported. The city's population grew fromapproximately 80,000 in the 1960s to over 500,000 at its peak, with POSCOdirectly or indirectly supporting a significant portion of local households.
The Wire Rod Plant No. 1, which ceased operations inNovember 2024, specialized in producing high-quality wire rods primarily usedfor tire reinforcement, springs, and various industrial applications. With anannual production capacity of 700,000 tons, it represented a significantcomponent of POSCO's diverse steel manufacturing portfolio. Wire rods, whileless visible than other steel products, are essential inputs for numerousdownstream industries, including automotive manufacturing, construction, and machineryproduction.
This closure occurs against a backdrop of broaderchallenges facing South Korea's traditional manufacturing sectors. Thecountry's steel industry, once a competitive advantage with its technologicalsophistication and quality focus, now faces intense competition from Chineseproducers who have dramatically expanded capacity while narrowing the qualitygap. Simultaneously, newer industrial powers like Vietnam and India areemerging as lower-cost producers, creating a competitive vice that squeezesKorean manufacturers from both directions.
Looking Forward
The empty space where wire rod coils once sat symbolizesboth an ending and a challenge. For POSCO and Pohang, the closure representsthe conclusion of one chapter in their industrial history and the necessity ofwriting a new one. The choices made by company leadership, governmentofficials, educational institutions, and workers themselves will determinewhether this transition leads to renewed prosperity or prolonged decline.
Key Takeaways:
• POSCO's Wire Rod Plant No. 1 in Pohang closed lastNovember after producing 700,000 tons of wire rods annually, marking the thirdplant closure in the company's 57-year history
• The closure symbolizes broader challenges facing SouthKorea's steel industry, including global overcapacity, intense competition fromChinese producers, rising production costs, and shifting market demands
• For workers like the 60-year-old employee with more thanfour decades at the plant, the closure represents the end of an era when steelmanufacturing provided stable, multi-generational employment
• The plant's shutdown reflects structural transitions inKorea's economy as traditional manufacturing industries face pressures toevolve toward higher-value, more specialized production
• Pohang, once transformed from a fishing village into athriving industrial city by POSCO's presence, now faces the challenge ofeconomic diversification as its core industry contracts
• The closure illustrates the broader challenges facingSouth Korea's economic model as the country navigates demographic decline,regional economic disparities, and the need to transition toward moreknowledge-intensive industries
