Jul. 11, 2026 - South Korea is expanding government support for its steel industry as producers face growing pressure from weaker global demand and tightening trade restrictions in key export markets.

Deputy Prime Minister and Finance Minister Koo Yun-cheol said the government will announce additional beneficiaries of its industrial crisis response programme later this month. The initiative is designed to prevent the downturn in the steel sector from spilling over into regional economies while protecting employment and preserving industrial capacity.

Steelmakers in Pohang and Gwangyang have already received KRW 24.7 billion (around USD 16 million) in financial assistance. An additional KRW 7 billion has been earmarked under the supplementary budget to extend support to more eligible companies.

Pohang, Gwangyang and Dangjin have all been designated as regions requiring preventive industrial support, allowing local governments and businesses to access targeted assistance through 2027 and 2028.

Alongside direct financial aid, Seoul plans to stimulate domestic steel consumption by promoting the use of high-quality steel products in downstream industries and encouraging closer cooperation between steel producers and end users. The government is also expected to strengthen import oversight by requiring disclosure of the country where steel was originally smelted, a measure aimed at preventing the circumvention of trade restrictions through third countries.

The latest package comes as South Korean steelmakers face increasing external headwinds. The European Union's revised steel safeguard regime, which took effect on 1 July, reduced tariff-free import quotas across multiple product categories. Although South Korea's quota was cut by about 20%, less than the EU-wide reduction of 46%, the new measures are still expected to weigh on Korean steel exports to one of their largest overseas markets.

To strengthen the industry's long-term competitiveness, the government plans to invest approximately KRW 500 billion in research and development. The funding includes KRW 308.8 billion for hydrogen-based steelmaking technologies and nearly KRW 200 billion for the development of ten high value-added specialty steel technologies.

The support measures reflect Seoul's broader strategy of offsetting weaker export prospects by strengthening domestic demand, accelerating technological upgrading and reinforcing the resilience of the country's steel industry amid a more protectionist global trade environment.