POSCO Constructs CGL for Automobile in China

POSCO, South Korean largest steel maker, plans to construct continuous galvanizing line (CGL) for April-June 2011 in Guangdong Province in China, which to start the operation in 2013. The CGL is the first for automobile as POSCO in China. POSCO is based in China which is largest automobile producer country in the world, and supplies high valued steel sheet to automobile makers such as Japanese makers.

POSCO’s board meeting gave approval the construction of the CGL in July, and POSCO gained approval from Chinese government on October 19. The CGL’s production capacity is 450,000 tones per year. POSCO establishes the CGL as joint company with Guangdong government.

POSCO had CGL for building material in Dalian and Shunde, while drew off both CGL due to reduction of economic efficiency. POSCO has joint company of cold rolling mill at 1.8 million tones per year with Benxi Iron and Steel in Liaoning Province, and didn’t have CGL for automobile.

POSCO started the operation of CGL at 400,000 tonnes per year in Mexico in 2009, and plans to construct CGL in India in 2012. New CGL in China is the third as POSCO in offshore market. POSCO is constructing seventh CGL in Kwang-Yang iron works, which aims to expand the sales of steel sheet for automobile by domestic and overseas CGL plants.

Chinese automobile output increased by 33.8% to 14.8 million cars for January-October from the corresponding of last year, which was higher than 13.8 million cars in 2009, and is expected to increase by over 30% to 18 million cars in 2010. Toyota Motor, Honda Motor and Nissan Motor are expanding the production in Guangzhou.