SEOUL (BLOOMBERG) - South Korea's top steelmaker Posco said it has halted output of some products as a prolonged strike by truck drivers adds more disruption to global supply chains.
The Pohang-based company stopped production at its four wire-rod factories and two cold-rolled steel plants as at 7am on Monday (June 13) after the strike by truckers exhausted Posco's warehouse space, it said in response to a Bloomberg query.
The daily output of wire rods will be curbed by about 7,500 tonnes, and cold-rolled steel by 4,500 tonnes, the firm said.
Shares of Posco Holdings fell as much as 3.4 per cent in early trading in Seoul on Monday.
The strike - one of the first economic challenges for newly elected President Yoon Suk-yeol - is entering its seventh day as truckers in the nation protest the removal of a minimum wage scheme amid soaring fuel prices.
Deliveries of automobiles, fuels, steel and materials for semiconductor chips have been suspended or delayed, exacerbating disruptions to global supply chains after Covid-19 lockdowns in China and Russia's invasion of Ukraine.
It is uncertain how long the strikes will continue, as talks between the trucker union and government officials have so far made little progress. A prolonged dispute threatens to have ripple effects across the globe, as South Korea is the largest exporter of memory chips and is home to some of the world's biggest car companies.
The daily volume of container boxes transported to and from the nation's 12 ports dropped 87 per cent on Sunday compared with the average for May, according to data from the Ministry of Land, Infrastructure and Transport.
Inbound and outbound volumes at Busan, the world's seventh-busiest port, were less than a fifth of their usual amount. Steel and cement are among the hardest hit industries so far, as drivers move to block deliveries of the Asian country's most critical export items.
Posco said last week it was struggling to ship a total of 35,000 tonnes of steel from its two plants to points within the country, down from the usual daily delivery of about 100,000 tonnes.
While Posco is working on minimising the impact from the strike, there is a possibility that the company may have to further reduce production depending on the scale and duration of the strike, according to a spokesman. The company is currently piling up products at carparks and roads inside its mill, it said.