South Korea Moves to Shield Steel Industry with K-Steel Act

K-Steel Act Aims to Reinforce South Korea’s Steel Industry

South Korea has launched a legislative initiative to defend its steel sector against mounting global economic and trade pressure. The K-Steel Act, introduced by 106 lawmakers across party lines, positions steel as a critical pillar of national security and economic strength. This bipartisan push responds to multiple challenges, including a 50% U.S. tariff and surging imports of low-cost Chinese steel.

The bill outlines a five-year national strategy supported by a presidential committee. It focuses on reinforcing domestic production, decarbonization, and supply chain resilience. Proposed measures include subsidies, tax breaks, and regulatory streamlining for companies investing in green steel technologies, such as hydrogen-based processes. These steps aim to help Korean producers remain competitive as the EU’s CBAM (Carbon Border Adjustment Mechanism) looms in 2026.

Moreover, the legislation proposes the creation of “green steel zones” with simplified permitting, strict rules of origin, and import restrictions on low-grade foreign products. Lawmakers assert that Korea’s steel sector is nearing a tipping point due to external trade frictions and internal environmental obligations.

Trade Pressures and Industrial Ecosystem at Risk

South Korea’s steelmakers face a uniquely tough environment. While the country recently signed a trade agreement with the U.S. to reduce steel tariffs from 25% to 15%, the originally imposed 50% remains in place. At the same time, the local industry must brace for new compliance costs under the EU’s CBAM, if it does not accelerate its green transition.

The Korean metallurgical industry supports core sectors such as shipbuilding, electric vehicles, and heavy manufacturing. Lawmakers argue that if steel capacity shrinks further, it could ripple across these strategic industries, weakening South Korea’s entire industrial base. The K-Steel Act, therefore, includes restructuring support and antitrust exemptions to allow mergers that strengthen domestic players.

In addition to domestic reforms, South Korea has committed to a $350 billion investment in the U.S. economy. This includes $150 billion for joint shipbuilding, and $200 billion for semiconductors, nuclear energy, and batteries. The country also pledged to purchase $100 billion in American energy, aligning trade interests while defending its own industrial assets.

SuperMetalPrice Commentary:

South Korea’s proactive stance through the K-Steel Act signals a strategic pivot toward industrial sovereignty and green competitiveness. As global decarbonization policies tighten and trade disputes intensify, nations must secure their critical materials sectors. Seoul’s bipartisan move aligns industrial policy with global ESG trends while protecting domestic capacity. The international metals market should closely monitor how this act reshapes regional trade, especially with the CBAM deadline and China’s steel overcapacity in view.