POSCO to Launch 2mn-ton Steel Plant in Gwangyang

South Korea's largest steelmaker POSCO is going to supply a large amount of more than 6mm-thick steel plates for shipbuilding and steel for line pipes by operating its two million-ton steel plant that has been newly built in the Gwangyang Steel Works. The company aims to make up for shortages in steel materials in the country, caused by the Japan earthquake.

Domestic shipbuilders that have been importing steel plates from three big Japanese steelmakers -Nippon Steel Corporation (NSC), JFE and Sumitomo Metal Industries - now expect that POSCO will help address the shortage problems, triggered by suspension of steel production operations in Japan.

POSCO announced that it held a ceremony for completing the two million-ton steel plant in Gwangyang on Monday.

The new plant, whose construction began in July 2008, has been under trial operation since last year. The first production volume at this plant was shipped out in last September.

With the operation, POSCO is expected to take a big leap to become the largest steel plate producer, especially for shipbuilding, in the world with an annual capacity to produce a total of seven million tons of steel plates for ships, including five million tons produced at the Pohang Steel Works.

As of last year, JFE held the largest production capacity of 5.5 million tons, followed by NSC with 5.2 million tons and China's Baosteel Group with 4.8 million tons.

Steel plates produced at the newest plant are going to be used for shipbuilding, maritime rescue operations and building API steel pipes.

Korea imported four million tons of steel for shipbuilding to meet domestic demand of 11 million tons last year.

"The operation of the new plant will curtail imports to 2.7 million tons this year, creating one trillion won ($899.39 million) worth import substitution effects," an official from POSCO said.

[Written by Il-ho Moon - Su-hyun Song / edited by Soyoung Chung] [ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]