Gov't to add steel crisis-response projects this month, inject W500b into R&D

The government plans to identify additional beneficiaries for its steel crisis-response program this month to prevent the industry's downturn from spilling over into regional economies. It will also require importers to disclose the crude steel production country of origin for imported steel products to block circumvention of trade rules, and will commit about 500 billion won ($328 million) to technology development. Small and medium-sized enterprises facing financial difficulties will receive an AI-based early warning system, to be built by next year, to support structural improvement.

Deputy Prime Minister and Finance Minister Koo Yun-cheol discussed these measures Wednesday at an emergency economic headquarters meeting combined with a ministerial meeting on economic and industrial competitiveness at the Government Seoul Building. The agenda covered a plan to expand steel demand and a support package for SME revitalization.

"We will actively support preemptive crisis-response zones in Pohang, Gwangyang, Dangjin and Incheon's Dong-gu — areas designated for industrial and employment crisis response — so that the steel industry's slump does not spread to regional economies, and we will select additional beneficiaries for the crisis-response program this month," Koo said. The government is currently running a 24.7 billion won crisis-response program targeting steel companies in Pohang and Gwangyang, and plans to expand coverage using 7 billion won allocated in the supplementary budget.

The government will also pursue demand-expansion policies to strengthen the steel industry's competitiveness. It plans to increase the use of high-quality steel materials by taking into account safety requirements and industry-specific characteristics, and to boost domestic demand by facilitating links between buyers and suppliers. Importers of steel products will be required to submit information on the crude steel production country of origin to block circumvention of unfair trade measures. To secure future competitiveness, the government will inject about 500 billion won in public funds — including 308.8 billion won for hydrogen-reduction steelmaking technology development and about 200 billion won for developing 10 high-value-added specialty steel technologies — and will step up support for AI-driven process innovation and safety investment.

The meeting also produced a support package for SME revitalization. The government said it would build an AI-based early warning system covering all 250,000 SMEs by next year to detect early signs of financial risk at the company level and support structural improvement and business transformation.

Support for financially distressed companies will also be strengthened. The government will incorporate SMEs' debt-restructuring performance into the financial sector's mutual-benefit finance index assessment, and will expand eligibility for structural improvement funds to include companies that have received court approval for a rehabilitation plan — broadening the current criteria, which cover only firms within five years of completing rehabilitation proceedings.

Companies with stagnant growth will receive a package of linked support measures, including dedicated R&D for new business transitions, AI training and smart-manufacturing workforce development, policy financing and credit guarantees, and sales-channel assistance, to help them pivot to promising industries.

Koo said the government would soon announce a second-half economic growth strategy — aimed at completing what he called the inaugural year of a great economic leap forward — through agile responses to shifting macroeconomic conditions, including the semiconductor boom, and efforts to reverse the decline in potential growth and overcome polarization, after final inter-ministerial consultations.

He added that the government would swiftly advance three mega-projects that could carry greater historical significance than the construction of the Gyeongbu Expressway or the IT revolution, mobilizing the full resources of the state. "Now that the site for the Honam region semiconductor cluster has been selected, we will push ahead at full speed, processing permits and other follow-up administrative procedures simultaneously," he said.