South Korean steelmaker Hyundai Steel resumed production on Wednesday after a temporary suspension due to a labour strike on Tuesday, Kallanish notes.

The steelmaker suspended operations across its major plants due to a large-scale strike by its labour union, the company announced on 11 February. The board decided to halt production from 7am on 11 February to 7am on 12 February, affecting key facilities in Dangjin, Incheon, Pohang, and Suncheon.

The strike comes at a challenging time for Hyundai Steel, which has been struggling with a downturn in the construction sector and increasing competition from low-cost imported steel. The company reported a 60.6% drop in operating profit last year to KRW 314.4 billion ($216 million), its lowest level since 2002, excluding the pandemic-hit 2020.

Despite these financial difficulties, the union is demanding wage hikes and improved benefits, citing record-breaking earnings by Hyundai Motor Group, the steelmaker's parent company. Key demands include a base salary increase of KRW 159,800, higher performance-based bonuses, and expanded vehicle purchase benefits for employees.

Union representatives staged a demonstration in front of Hyundai Motor Group's headquarters in Seoul, with participation from workers across Hyundai Steel's plants nationwide. They argue that despite Hyundai Steel's weaker financial performance, employees deserve compensation similar to that received by Hyundai Motor's workforce.

The labour dispute has remained unresolved for over five months, with negotiations deadlocked since initial talks began last September. Previous partial strikes have failed to break the impasse, leading to escalating union action.

Meanwhile, the broader steel industry in South Korea is facing headwinds, including continued price pressure from Chinese steel exports and the US government's plan to impose a 25% tariff on steel imports. These factors are adding further uncertainty to Hyundai Steel's outlook as it navigates both internal and external challenges.