Hyundai Steel mulls sale of caterpillar track division at Pohang plant

Hyundai Steel Co., South Korea’s second-largest steelmaker, said Monday it is considering selling a division that produces caterpillar tracks at one of its domestic plants, amid a prolonged slump in the construction industry.

The company is in talks with Daejoo.KC — whose business spans steel structures to auto components — to sell the caterpillar track division of Pohang 1 plant, located 273 kilometers southeast of Seoul, a Hyundai spokesperson said.

“Sales of caterpillar tracks produced by Hyundai Steel plunged 65 percent last year compared with 2021 due to intensified competition and an oversupply of low-priced Chinese products,” the spokesperson said.

Hyundai Steel said it will guarantee job security for employees currently working in the division by relocating them to other departments.

The caterpillar-track system is used in the manufacturing of heavy equipment, such as excavators, bulldozers and track loaders.

In recent months, the company has faced mounting challenges due to weakening demand and steep U.S. tariffs.

In April, Hyundai Steel temporarily shut down one of its three domestic steel reinforcement bar (rebar) plants in Incheon, just west of Seoul, for the entire month due to low demand.

In March, the company declared an emergency management mode in response to growing difficulties, including U.S. tariffs imposed under the Donald Trump administration and ongoing labor disputes.

The emergency measures followed the temporary suspension of its cold-rolled steel facility in Dangjin, about 80 km southwest of Seoul, from February 24 to March 31 due to a monthslong strike by unionized workers demanding wage increases.

To mitigate the impact from U.S. tariff hikes, Hyundai Steel announced plans to invest US$5.8 billion in building an electric arc furnace-based integrated steel mill in Louisiana by 2029, with the aim of starting production the same year.

Hyundai Steel currently operates a blast furnace-based integrated steel plant in Dangjin and electric arc furnace facilities in Incheon and Pohang.