Daehan Steel

Daehan Steel is an electric-arc-furnace steelmaker that produces billet and rebar from steel scrap, operating production facilities in Busan and Pyeongtaek.

Its core product, rebar, is supplied to domestic construction companies and distributors, and the company has recently expanded exports by securing overseas standard certifications including ASTM (US), JIS (Japan), BS (UK), and AS/NZS (Australia).

The domestic rebar market is an oligopolistic structure in which Daehan Steel competes with Hyundai Steel, Dongkuk Steel, Korea Steel, and YK Steel, and earnings are closely tied to the construction cycle.

Steel scrap, the key raw material, is sourced partly from southern-region suppliers, and scrap price swings directly affect production costs.

The company has recently been restructuring toward a profitability-focused strategy through cost cuts (scrap, logistics, energy), export expansion and price normalization, and reduction of low-margin volumes.

As new growth businesses, it is pursuing Aimos, an AI-based scrap-grading solution, Arkerd, an industrial workwear brand, and GREF, a smart-farm business utilizing waste heat, in an effort to diversify revenue sources beyond its core steel business.

Its overseas subsidiary Daehan Steel America entered liquidation proceedings during the second quarter of 2026, with its results reclassified as discontinued operations.

This restructuring aligns with a shift toward reducing the burden of overseas subsidiary operations while centering exports on direct shipments from the parent company.

Daehan Steel's revenue fell sharply from KRW 2,141.6bn in 2022 to KRW 1,447.8bn in 2023 and KRW 1,224.5bn in 2024, before rebounding modestly (+1.8%) to KRW 1,247.1bn in 2025.

Operating profit contracted steeply from KRW 215.38bn (operating margin 10.1%) in 2022 to KRW 109.93bn (7.6%) in 2023 and KRW 10.32bn (0.8%) in 2024, before turning negative at an operating loss of KRW 2.87bn (-0.2%) in 2025.

Notably, owners' net income for 2025 remained positive at KRW 14.70bn despite the operating loss, suggesting non-operating items helped offset the operating shortfall.

On a quarterly basis, operating profit held a moderate pace at KRW 7.92bn in Q2 2025 and KRW 8.00bn in Q3 2025, before a sharp operating loss of KRW 20.66bn in Q4 2025 dragged the full-year result into negative territory.

Building on that Q4 loss base, Q1 2026 operating profit barely turned positive at KRW 64 million, and the recovery widened in Q2 2026 with revenue of KRW 386.47bn and operating profit of KRW 16.72bn.

The company attributed this recovery to a rebound in utilization from expanded rebar exports, improvements in cost and selling prices, and lower borrowings driven by working-capital efficiency.

Owners' net income for Q2 2026 is not yet within the confirmed financial data scope; however, according to the fair disclosure filed on July 31, 2026 and subsequent media reports (Korea Metal Weekly, August 2, 2026), it was reported at a provisional figure of roughly KRW 6.97bn, a number affected by the reclassification of the liquidated overseas subsidiary as a discontinued operation.

The debt ratio has trended down from 52.9% in 2022 to 34.4% in 2025, pointing to a relative improvement in financial stability.

The domestic rebar market has been directly affected by the construction downturn, with supply-demand weakness persisting through the second half of 2025.

In a February 2026 report, BNK Securities noted that increased rebar exports to the United States were improving domestic supply-demand balance, and that exports hit a record 110,000 tons in January 2026.

Given that domestic rebar demand runs at roughly 600,000 tons per month, monthly export volumes of around 100,000 tons were assessed as providing relief to an otherwise weak domestic market.

The government has also indicated it would present restructuring guidelines during the first half of the year to address structural oversupply in the rebar industry, leaving the pace of sector-wide supply adjustment as a key variable.

In a May 2026 report, Hyundai Motor Securities assessed the industry environment as still challenging, but noted that rebar producers' supply-side improvement efforts were feeding through into price increases, with domestic rebar demand also expected to see a modest improvement.

Compared with larger competitors such as Hyundai Steel and Dongkuk Steel, Daehan Steel is relatively smaller in revenue scale, but it positions its diversified overseas certification portfolio and export capability as a competitive differentiator.

The industry itself has not fully escaped the structural burden of reduced construction investment and oversupply, and the actual pace of progress on the twin variables of exports and restructuring will likely be key to any recovery.

The company has outlined its 2026 direction as combining a 'profitability-focused strategy shift' with 'global and new-business growth,' citing cost reduction (scrap, logistics, energy), export expansion and price normalization, and a reduction of low-margin volumes with an improved customer mix as concrete action items.

On the export front, the company reported that rebar exports increased 45% quarter-on-quarter, and it has maintained standard certifications across the United States, Japan, the UK, and Australia to manage partnerships with overseas buyers.

On the capital policy front, the company decided in November 2025 to retire 500,000 treasury shares worth KRW 7.6bn, and in January 2026 carried out a bonus share issue allocating 0.6616554 new shares per existing share, increasing total shares outstanding from 22,914,397 to 34,371,596.

These measures are being pursued as part of the company's stated value-enhancement plan.

In its new-business segment, the company continues efforts to broaden its stable earnings and cash-generation base through Aimos, an AI-based scrap-grading solution, the Arkerd workwear brand, and GREF, a waste-heat-based smart farm business, with Arkerd expanding brand exposure by participating in the K.I.S.S. 2026 safety and health exhibition in July 2026.

Liquidation proceedings for the overseas subsidiary Daehan Steel America began during the second quarter of 2026, making the related profit/loss impact and completion timeline items to monitor going forward.

Whether the government's rebar restructuring guidelines are implemented, along with the sustainability of export volumes to the United States, remain the key variables that will determine the pace of any earnings recovery.