South Korea: POSCO to furlough plate mill -1 at Pohang steelworks

While work to recover full operations at its Pohang works continues apace, South Korean steel giant POSCO won't be resuming operations on the No.1 plate mill at the works, Mysteel Global understood.

Much of the Pohang works on Korea's southeast coast was flooded in early September when super-Typhoon Hinnamnor made landfall near Pohang, forcing the company to halt all operations there for the first time in its 49-year history, as reported.

In a statement issued late last week, POSCO said it expected 15 of the works' 18 rolling mills to be wholly restored by year-end, though an exception will be the No.1 plate mill that POSCO had commissioned in July 1972.

Installed initially with a capacity of 400,000 tonnes/year (and subsequently lifted to 600,000 t/y), the mill played a vital role in supplying heavy plate and ship plate to Korea's burgeoning shipbuilding and construction industries at that time.

But in the decades since, the mill has been eclipsed by much larger and more efficient plate mills, namely the 2.7 million t/y No.2 mill and the 1.2 million t/y No.3 mill. Even before Hinnamnor deluged the Pohang works, the pioneer mill's future was in doubt.

POSCO said that with the No.2 and No.3 mills back on stream - the No.3 was restarted in October and the No.2 in early November - there should be no supply problems surrounding heavy plates.

Moreover, should a shortage suddenly occurs, POSCO noted that it could always source plates from PT.KRAKATAU POSCO, the 70-30% integrated mill joint venture it has with Indonesia's Krakatau Steel, located in Cilegon in northwestern Java. The 3 million t/y steel plant can produce 1.8 million t/y of slab and 1.2 million t/y of plate, Mysteel Global notes.

Taking a keen interest in POSCO's plate mill decisions will be Japanese mills for whom South Korea is a massive market.

During January-September this year on the most recent data from Japan Iron & Steel Federation, Japanese mills shipped 769,100 tonnes of heavy plates to Korea, higher by a huge 160% from the first nine months of last year.

POSCO did not say whether the No.1 mill will be kept in reserve, sold as second-hand equipment, or scrapped down.

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.