Steel Industry's New Year
KOSA Chairman Lee calls for restructuring to survive competition

The Korea Iron and Steel Association held its new year reception at Renaissance Hotel in downtown Seoul on January 6, with attendance from 200 government officials and industry people including Minister of Commerce, Industry and Energy Lee Hee-beom and Chairman of the association Lee Ku-taek.
Chairman Lee, who also is the chairman of POSCO, opened the gathering with a remark that the steel business will recover in the second half of this year. He recalled that the industry had a difficult year last year with the business becoming sluggish in the second half, adding that this year, the industry will have a bad turn in the first half, but will rebound during the second half. "We all have to work hard to have good results this year,"the chairman stressed. What made the industry have a sluggish second half last year was due to cheap steel imports from China where steel production increased sharply causing an over supply in China's steel market Lee explained.
The POSCO chairman predicted that the steel business will turnaround in the second half of this year, with the demand for steel rising 500,000 tons, to bring the projected steel consumption to 47.4 million tons this year. The economic growth is projected to reach 5 percent this year to back up the rise in the steel consumption. The Japanese steel industry is less concerned than us because it has restructured its system, despite run on cheap Chinese steel. It is because our steel market foundation is still weak, a sign that we have to make it stronger. It shows us that we have to face competition not with quantity, but with quality, meaning that we have to produce better products with advanced technology and eliminate waste to be cost-competitive and raise the industrial effectiveness through mutual cooperation.
The out-going MOCIE Minister Lee said it was a great year for the steel industry with the success of POSCO's project to build a steel mill in India, Dongguk Steel' investment in a slab plant in Brazil, and the cooperation between large and small steel firms to share results. The government will do its part to support the steel industry's $6.5 billion investment in R&D projects and reduction of import tax for raw materials for steel to make securing raw materials stable.
In the meantime, POSCO held a new year's reception for its suppliers of raw materials and installations, among others, at the POSCO Center's Steel Club on January 5. The POSCO chairman told the leaders of 58 vendor firms that POSCO was able to achieve good performance last year with the help of all vendors, with an honor for him to receive the large and small companies'cooperation award.
Chairman Lee went on to say that this year could be a hard year for the steel industry, but POSCO will be able to overcome difficulties with the support of its suppliers, with a promise that POSCO will do its utmost to strengthen its supplier network, by helping them develop technologies and improve their products.
POSCO will try to secure raw materials on a stable basis and on economic terms, competitive in cost, and continue to practice ethical samples, the chairman said, in the way of explaining POSCO's purchase policies. The steel maker selected Rio Tinto and Korea Cotrell as the most excellent suppliers of raw material, and installations and 8 others including Samwoo Machinery as excellent suppliers and presented them with plaques of thanks. POSCO has been giving help to these firms in a number of areas including the waiver of guarantee money in biddings and introducing them to overseas steel firms and installation suppliers for them to find ways to advance overseas.
Heads of vendor firms thanked POSCO for providing information on its purchase policies before hand so that they could have enough time to prepare to follow the policies. The also pledged to do their best to maintain a win-win partnership with POSCO in the days ahead. nw

Dignitaries including MOCIE Minister Lee Hee-beom and POSCO Chairman Lee Ku-taek are shown at the KOSA's new year reception Jan. 6.