As the completion date for Hyundai Steel's No 3 blast furnace in Dangjin, S Korea is fast approaching next month, other steelmakers are busy coming up with response plans for the giant's emergence.
Once the steel works begins producing so much more steel will be available for its captive customers, Hyundai Motor and Kia Motors, the rivals are certain that they would end up losing a large share of the market.
According to company sources on August 20, Hyundai Steel will complete the construction of its No 3 blast furnace on the 27th September. Of the 4Mt/y output, the company will produce 400kt of specialty steel products and 25kt in iron powder for use in sintering precision auto parts such as for the engine and transmission. The remaining 3.5Mt of molten iron will be used to make hot-rolled steel coil (2Mt) and thick plates (1.5Mt).
A Hyundai Steel official said, "Most of the plate will be supplied to an affiliate, Hyundai Hysco and there would be not much being sold in the market." Posco and Dongkuk, the largest and second largest producers of plate in the country, also believe that the new blast furnace will not have much impact on the plate market as Hyundai Steel is not yet up to the level of producing high-quality thick plate.
In contrast, SeAH Besteel, the company supplying about a half of the country's specialty steel demand, is concerned that it will lose much from the rise of this new competitor. A SeAH Besteel official said, "Before Hyundai Steel begins producing specialty steel products and steel bars in volume for Hyundai Motor and Kia Motors, we must look for other customers overseas as much as possible."
Source: ‘The Korea Economic Daily’, Seoul; 21 Aug 2013