'Reconstruction' to Surge After War Ends... Steel Industry Poised for a Rebound

Expanding Demand for Middle Eastern Infrastructure Reconstruction

Steel Industry Poised to Benefit from Construction and Plant Sectors

Major Players Like POSCO and Hyundai Steel Seek Participation in Large Middle Eastern Projects

Oil Prices and Tariff Hikes Remain Uncertainties

As the Middle East war continues for over a month, there are growing expectations that postwar reconstruction demand could drive the mid- to long-term recovery of the domestic steel industry. Analysts suggest that as infrastructure rebuilding in the Middle East accelerates during postwar recovery, steel demand will rise, providing an opportunity for the struggling industry to rebound.

According to the steel industry on April 9, domestic steelmakers, currently facing a downturn due to sluggish downstream industries, the influx of low-priced Chinese products, and the strengthening of global trade barriers, are planning to capitalize on reconstruction demand after the war to stage a recovery. If the raw material supply chains, which have been disrupted by the conflict, stabilize, improvements in profitability for the steel industry are also expected to become more visible.

Back in 2016, during the nuclear agreement, Iran expressed a high level of trust in South Korea’s infrastructure technology and industrial capabilities. South Korea is considered a competitive partner in major industries such as steel, construction, automotive, and energy equipment.

A Korea International Trade Association official stated, "If the Middle East war ends, postwar recovery demand is likely to increase exports related to infrastructure, including steel," adding, "This could serve as an opportunity for Korean companies to expand into Middle Eastern countries."

In particular, steel products linked to the construction and plant industries are highly likely to benefit directly during the postwar recovery phase. During the reconstruction stage after the war, social overhead capital (SOC) such as roads and bridges, as well as industrial facility restoration, are simultaneously pursued, typically resulting in a rapid increase in steel demand.

An industry insider explained, "Looking at past examples such as the Ukraine war, there has consistently been demand for essential materials during postwar recovery, and steel companies have seen positive impacts as a result. Since a wide range of material support accompanies postwar reconstruction projects, additional demand is expected to arise in key sectors such as steel and construction, leading to hopes for a business rebound."

POSCO is reviewing the expansion of high-grade steel supply linked to energy infrastructure in the Middle East and is seeking opportunities to participate in large-scale projects with eco-friendly technologies such as hydrogen reduction steelmaking. Hyundai Steel is maintaining its business structure focused on automotive steel sheets but is also looking to expand the supply of structural steel and thick plates to meet Middle Eastern construction demand. Dongkuk Steel is reviewing strategies to respond to plant and construction demand based on its product portfolio centered on thick plates and structural steel. SeAH Steel is closely watching the potential for increased demand for steel pipe products in Middle Eastern energy projects.

Despite expectations of rising demand, some voices remain cautious, pointing to persistent uncertainty due to the Middle East war. The timing of peace remains unclear, and there are multiple complicating factors: tariff burdens from protectionist policies, weakened global demand due to the protracted conflict, rising oil prices, and inflationary pressures.

An industry official noted, "It is common for steel demand to rise during the postwar recovery phase. However, at present, negative factors such as demand slowdown and increased cost burdens from the prolonged war are having a greater impact."

This content was produced with the assistance of AI translation services.