Thursday, May 19, 2005
Posco seeks approval to build steel mill in China
Press Trust of India
Singapore, May 19, 2005
Posco, Asia's third largest steel-maker, is seeking permission to build a mill in China with capacity equal to 33 per cent of the company's output to expand in the world's largest steel market.
Chairman Lee Ku-Taek said the company plans to expand in China at a time when the government is clamping down on new steel investment to ease a shortage of iron ore and coal.
Posco submitted plans to China's government for a 10 million metric ton plant, General Manager Jeong Tae Hyun said.
Posco's investments in mines in India and Brazil might help the Pohang, South Korea-based company secure raw materials for expansion and close the gap on larger rivals such as Mittal Steel and Nippon Steel.
Mittal Steel bought International Steel Group for $4.5 billion last month, overtaking Arcelor as the world's largest steel-maker and giving the company more leverage with customers and suppliers as falling demand and rising raw-material costs.
Posco said it was studying a plan to build a steel mill in China's coastal city of Ningde, in the south-eastern province of Fujian.
"We are yet to decide on the investment amount in China, which could be similar to what we may invest in India," Posco's Jeong said. Posco will set up the plant in partnership with a Chinese company, he said.
Steelmakers worldwide are increasing capacity as demand from China pushes up prices and reduces supply. China's steel demand has risen 20 per cent a year on average since 2000 as consumers buy more cars and refrigerators.
China will account for nearly 80 per cent of global steel demand growth this year, the International Iron and Steel Institute said.
© HT Media Ltd. 2005.