Posco starts new stainless steel production
POSCO’s CRC stainless steel mill with the capacity of 400,000 tons started into production on December 16. Spokesman of POSCO said that it is a main body for the company’s strategy in adjusting the products structure.
The CRC mill began to be started in August and tried out production in November. The output had input in domestic market.
The market participant involving in the project said that the first batch of 3,000-4,000 tons production put into market with discount price, but with the formal operation of the mill, the price will resume to the normal level.
It was originally established in 2005, but taking the overcapacity of the stainless steel into consideration, the project was delayed. Presently POSCO has a stainless steel capacity of 3mln tons, including the output of 1mln tons from ZPSS.
Other media spread the news that another stainless steel manufacturing enterprise in South Korea-BNG Steel intends to set up a stainless steel mill in January of 2010.
South Korea domestic traders of stainless steel said that although the supply has saturated in South Korea stainless steel market, they are not worried about the extra production from the new mill. The monopoly stance of POSCO in the stainless steel market made it not expect the price down, therefore, the difference between the import price of China and South Korea domestic price ensured POSCO profitable. Take 304 stainless steel for an example, the sales price of 304 HRC in South Korea domestic market is 3.05mln Won per ton (U.S.$2,628 per ton) and CRC price is at 3.32mln Won per ton (U.S.$2,861 per ton),in the same period, the FOB price of Shanxi TISCO 304 CRC stands at U.S.$2,600 per ton and HRC price is at U.S.$2,450 per ton.