(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 of 7 a.m. Monday after the strike by truckers exhausted Posco’s warehouse space, it said in response to a Bloomberg query. The daily output of wire rod will be curbed by about 7,500 tons, and cold-rolled steel by 4,500 tons, the firm said.
Shares of Posco Holdings Inc. fell as much as 3.4% 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.
See also: Trucker Strike in South Korea Poses New Risk to Global Trade
It’s uncertain how long the strikes will continue, as talks between the 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% 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 tons of steel from its two plants to points within the country, down from the usual daily delivery of about 100,000 tons.
While Posco is working on minimizing the impact from the strike, there’s a possibility that the company may have to further reduce production depending on the scale and duration of the strike, according to a spokeswoman. The company is currently piling up products at parking lots and roads inside the mill, it said.
©2022 Bloomberg L.P.