JFE Steel to Expand 13%-Chrome Seamless Pipe Output by 30%

JFE Steel announced on Monday it would expand output capacity of 13% chrome steel seamless oil well tube by 30% to 120,000 tonnes for around 10 billion yen starting the operation in January 2007. The firm tries to keep the world no.1 market share for the product by expanding the capacity when the demand increases for gas field development, which needs deeper digging and requires higher grade materials. The firm expands capacity of rolling mill, heat treating, inner finishing and screw cutting at small diameter seamless pipe plant in Chita works. The firm introduces high speed piercing and precision rolling technology in the rolling mill while the firm converts the heat treating and inspection line into higher precision and higher speed heat treating furnace. The firm tries to eliminate the bottleneck in the series of processes by the renovation with new facilities including new special screw processing machine and scale removing machine. The firm starts the working in the end of March 2006. JFE Steel will produce and sell around 1.8 million tonnes of steel pipe products including around 380,000 tonnes of seamless pipe for the year to March 2006. The firm produces 90,000 tonnes of 13% chrome oil well tubing seamless pipe, for which the firm has around 40% of world market share. The 13% chrome product represents more than 25% of the profit for the steel pipe business due to the higher value and is leading item for the no.1 and only one products, which represents 40% for the pipe business. The demand increases for high grade oil well tube with higher corrosion resistance under high pressure and high temperature when the developers have to dig the gas field as deep as 4,000 meters. JFE Steel’s production of 13% chrome oil well tube increased to 8,000 tonnes per month and JFE Steel expects the world demand will increase to annual 250,000 tonnes in 2008 from current 200,000 tonnes. The firm decided to expand to meet the higher demand. The firm will increase the seamless pipe production to more than 400,000 tonnes per year by the expansion under the new mid-term business plan starting April 2006. The firm expects the UOE large diameter steel pipe output will keep the full capacity operation at annual 600,000 tonnes under the new business plan. The firm produces the products at Chiba area of East Japan works and Fukuyama area of West Japan works. The firm also considers investment to produce high strength steel pipe of X100 and X120 grade of American Petroleum Institute.