Dongkuk Steel Mill

Dongkuk Steel is a steel manufacturer built on two main pillars: rebar and section steel (long products) and heavy plate for shipbuilding and industrial use.

In the first quarter of 2026, rebar and section steel accounted for about 69.8% of revenue, while by the second quarter heavy plate represented roughly 27% of sales with long products making up most of the remainder.

Long products are split between construction rebar and section steel used in industrial and infrastructure structures, with recent growth coming from section steel demand tied to semiconductor and AI data center construction.

Heavy plate supply is centered on shipbuilders, and the company has diversified into pipe and construction plate, titanium-clad plate, and specialty plate for aerospace and precision metal applications.

In response to weak construction demand and trade barriers in major markets, the company set up a dedicated export organization under its sales division to develop overseas product specifications and secure new customers. Through its online steel distribution platform "SteelShop,

On a consolidated basis, annual revenue rose from KRW 2.6321 trillion in 2023 to KRW 3.5275 trillion in 2024, then declined again to KRW 3.2034 trillion in 2025.

Operating profit fell for three straight years, from KRW 235.5 billion to KRW 102.5 billion to KRW 59.4 billion, while the operating margin dropped sharply from 8.9% to 2.9% to 1.9%.

Owners' net income contracted even more steeply, from KRW 142.2 billion in 2023 to KRW 34.8 billion in 2024 and just KRW 8.2 billion in 2025, indicating that profitability eroded faster than top-line size over the three years.

On a quarterly basis, after posting operating profit of KRW 24.5 billion and owners' net income of KRW 10.1 billion in the third quarter of 2025, the company saw operating profit collapse to KRW 0.7 billion and owners' net income swing to a loss of KRW 13.5 billion in the fourth quarter of 2025 on revenue of KRW 815.0 billion.

The company then returned to profit in the first quarter of 2026 with operating profit of KRW 21.4 billion and owners' net income of KRW 6.2 billion, and both metrics expanded further in the second quarter of 2026, with revenue of KRW 995.5 billion, operating profit of KRW 45.6 billion, and owners' net income of KRW 11.6 billion.

This recovery reflects the combination of a seasonal peak period, improved profitability in long products driven by rising infrastructure demand from semiconductors and AI data centers, and firm shipbuilding-related plate demand.

The sharp deterioration in the fourth quarter of 2025, however, stemmed from a combination of lower sales volumes, falling product prices, and rising cost pressure from electricity and scrap metal, resembling a structural squeeze at the cycle's trough rather than an isolated one-off event.

On the cash generation side, operating cash flow declined for three consecutive years, from KRW 348.4 billion in 2023 to KRW 213.6 billion in 2024 and KRW 114.6 billion in 2025, while the debt ratio rose from 87.7% in 2024 to 119.4% in 2025, suggesting that balance sheet metrics have grown somewhat heavier relative to the pace of earnings recovery.

Korea's steel industry contracted for three consecutive years from 2023 to 2025, but observers say 2026 has brought a phase of market normalization as government anti-dumping duties coincided with China's production cuts and export licensing.

Korean authorities imposed anti-dumping duties of 27.91-38.02% on Chinese plate, 28.16-33.10% on Chinese hot-rolled coil, and 31.58-33.43% on Japanese hot-rolled coil, and domestic prices for hot-rolled coil, rebar, and plate all rose from the start of the year as a result.

Nonetheless, domestic rebar consumption has structurally declined from 11.2 million tons in 2021 to roughly 7 million tons recently, driven by a drop in average annual apartment pre-sale units from 350,000 in 2019-2022 to about 220,000 since 2023.

Amid this demand contraction, the government's steel industry upgrade plan designated rebar as a priority area for capacity adjustment, and signs of capacity reduction at some competitors have raised discussion of easing domestic oversupply pressure over the medium term.

Domestic rebar utilization remained low at around 66% on a rolling basis as of July 2026, with Dongkuk Steel and several other makers cutting output compared with the prior month.

The plate segment benefited from a shipbuilding order boom, maintaining higher utilization than long products, and domestic plate prices in the first quarter of 2026 rose above the prior-year average.

Combined first-quarter 2026 revenue for the four major steelmakers (POSCO, Hyundai Steel, Dongkuk Steel, SeAH Steel) grew slightly year over year, but their combined operating profit actually declined, illustrating that revenue recovery and profitability recovery do not always move in the same direction in this industry.

Longer-term cost burdens from high U.S. tariffs and the EU's Carbon Border Adjustment Mechanism (CBAM) also remain challenges for the sector as a whole.

The company said it continued to strengthen competitiveness in high-value-added products in the first half of 2026, including developing new export section-steel specifications and improving specialty plate manufacturing processes, and this product diversification is expected to continue in the second half.

Securities analysts have pointed to an aggressive sales strategy tied to import restrictions on Chinese plate, along with an expected improvement in the domestic rebar market later in the year, as variables for improving long-product profitability.

In an April 27, 2026 report, Hana Securities said the rebar market recovery was underway and that plate prices had turned upward in line with import restrictions on Chinese plate and a broader rise in flat product prices, maintaining a BUY rating and a target price of KRW 14,000.

However, the same analysis noted that rising import costs for slab and other raw materials, driven by a weaker won, could limit the pace of margin improvement in the plate segment.

Discussions around capacity adjustments in rebar under the government's steel industry upgrade plan, along with production cuts and capacity adjustments at competitors, are cited as factors that could ease medium-term domestic oversupply pressure.

The company expects demand from large-scale industrial infrastructure such as semiconductors and AI data centers, as well as shipbuilding-related plate demand, to continue in the second half, and it is maintaining channel diversification through its online distribution platform and dedicated export organization.

That said, industry observers also caution that if the construction market recovery is delayed or raw material price volatility increases, the pace of quarterly earnings improvement may not be uniform.