President Yoon Suk-yeol, who was facing a major early test in the form of the labour action that started about a month after he took office, welcomed its end.
“It’s time to cooperate as we are walking on ice due to a global economic crisis resulting from high consumer prices and high interest rates,” Yoon told reporters.
Truckers walked off the job Tuesday last week to demand minimum pay guarantees and to protest a surge in fuel prices.
The government estimated on Monday that the strike has caused 1.6 trillion won (US$1.2 billion) of losses to the country’s auto, steelmaking and petrochemical industries through disruptions to production and shipments.
The strike had crippled the southern port of Busan and others, including Ulsan, by halting shipments of goods. Resolving it quickly was seen as crucial for Asia’s fourth-largest economy as it battles soaring inflation and, like other industrial countries, struggles with global supply chain issues.
“Logistics matters as they’re like arteries for human beings,” CW Chung, a senior analyst at Nomura in Seoul, told Nikkei Asia. “As the strike ends, I expect they will return to pre-strike levels.”
South Korea’s ministry of land, infrastructure and transport and the Cargo Truckers Solidarity Union forged a tentative deal to end the walkout. The union said in a statement that the two sides agreed to continue talks over its demand for pay guarantees.
Investors in some strike-hit companies cheered the progress. Hyundai Motor shares jumped as much as 4.4% today in reaction to the news and closed up 1.5%, although the broader Kospi index failed to keep pace, falling 1.8%.
“Production has been normalised at our Ulsan Plant, and we will continue to minimise customer inconvenience from the production disruption,” Hyundai in a statement, referring to a major factory in the southeastern port city of Ulsan.
Logistics company Hyundai Glovis rose 2.4%, while automaker and Hyundai Motor affiliate Kia gained a marginal 0.1%. Together Hyundai Motor and Kia form the world’s fifth-largest automaker.
Posco Holdings, meanwhile, said in a statement that its two steel mills in Pohang and Gwangyang would resume shipments in the afternoon. But the steelmaker estimated that it would take more than 10 days to ship 300,000 tonnes of products delayed by the strike.
The company also said it would resume manufacturing of wire rods at four factories and cold rolled steel at one in Pohang, starting Thursday, as the company aims to make up for 23,000 tonnes of wire rods and 13,000 tonnes of cold rolled steel that could not be produced due to the strike. “Posco will increase production to supply planned volume to our customers,” the company said.
Shares in Posco Holdings initially rose 0.9% in the morning on news of the strike’s resolution, but reversed course in the afternoon, closing 0.8% down.