DongKuk Steel to Decide Blast Furnace Construction in Brazil in 2009

DongKuk Steel, South Korean major steel maker, will decide whether to construct a steel works for slabs in Brazil within this year. The firm has advanced the feasibility study with CVRD for the construction of a blast furnace with capacity at 3 million tonnes per year in the first-phase plan. The firm hopes to secure own steel resources for plates by the new plant in Brazil. JFE Steel is entertaining to participate in its second-phase construction of an additional blast furnace with 3 million tonnes capacity. DongKuk Steel said the firm starts first phase and second phase construction at the same time if JFE Steel enters the plan.

DongKuk Steel is carefully entertaining to construct steel works in Brazil when steel demand is declining worldwide. In past times, the firm abandoned to construct a reduced iron plant using natural gas with CVRD and Danieli, Italian steel machine maker, due to higher natural gas cost.

DongKuk Steel expanded the production capacity of no.2 steel plate mill by 300,000 tonnes to 1.9 million tonnes at Pohang steel works in November 2008 and will start the operation of a new plate mill with 1.5 million tonnes annual capacity at Dangjin steel works in November 2009. The firm has no.1 plate mill with 1 million tonnes capacity in Pohang steel works. The firm hopes to secure steel resource when necessary quantity of slab increases by 1.8 million tonnes until the end of 2009.

The firm expects JFE Steel’s assistance in technology or operation know-how. However, DongKuk Steel will start the first phase plan in Brazil with CVRD if JFE Steel doesn’t participate the plan.