S. Korean steelmakers mull output cut amid slowing demand

SEOUL, Oct. 22 (Yonhap) -- South Korean steel mills are moving to cut output this
year as a global economic downturn is draining demand while inventories pile up,
industry sources said Wednesday.
POSCO, the world's fourth-largest steelmaker, is planning to scale back output of
stainless steel by 150,000 tons in the fourth quarter to cope with slowing
demand.
The price of nickel, used to make stainless steel, has dropped recently, but
demand for the product has fallen sharply as well in line with the global
economic slump, the steelmaker said.
Hyundai Steel Co., South Korea's No. 2 steelmaker, is also mulling a reduction of
H-beam production because of increased stockpiles. "The local construction sector
is in a slump, which means a rise in stockpiles of the product," said an official
at Hyundai Steel.
Other steel mills, including Dongkuk Steel Mill Co., are considering a 10 to 20
percent cut in their steel production, according to the sources.
The financial crisis, which was ignited by the subprime mortgage rout in the
United States, has slowed economic growth worldwide, causing recessions in the
U.S., Europe and parts of Asia and dampening demand for metals.
Shares of POSCO were trading at 309,000 won (US$227) on the Seoul bourse as of
10:50 a.m., down 3.74 percent.