In October 2011, Sumitomo Metal Industries will start commercial shipment of seamless steel pipe from Vallourec & Sumitomo Tubos do Brazil (VSB), the joint company between Sumitomo Metals and Vallourec. VSB will acquire approval for American Petroleum Institute (API) within September and start commercial production. VSB is also preparing for approval acquisition from oil majors. VSB plans to raise operating rate along with blowing-in of no.1 blast furnace in mid October and to start no.2 blast furnace next year. VSB is expected to enter full operation for July-December 2012 with crude steel output capacity at 1 million tonnes per year and seamless pipe output capacity at 600,000 tonnes per year, in which Sumitomo Metals has invested R$ 5 billion (approx. 241.8 billion yen).
VSB started operation of rolling line in December 2010 and electric furnace in August 2011 in connection with billet continuous casting line. Integrated operation has smoothly started from steel making to product rolling processes. VSB already completed approval procedures for API. VSB can enter commercial production of seamless pipe after API acquisition within September. The firm also progresses approval acquisition from each pipe customers and raises the production and the sales early. VSB now implements test production using raw materials mainly ferrous scrap. Blow-in of no.1 blast furnace is scheduled in mid October for actual operation of the integrated steel plant. Sumitomo Metals will send engineers of blast furnace in mid September and formally decide the blow-in time schedule. No.2 blast furnace and the pellet plant are expected to start operation in 2012. VSB’s operation can enter integrated production system in 2H 2012 as planned. Sumitomo Metals projects to build up most effective production system in balance with the its seamless pipe plants in Japan as well as capacity expansion.