Acerinox to Follow Asian Stainless Demand at Malaysia Base

World stainless major, Acerinox of Spain tries to build Malaysian stainless steel melt shop and hot rolling line with 1 million tonnes of annual output capacity in future through the joint venture with Nisshin Steel, Bahru Stainless. With the new capacity, the group’s annual raw steel output capacity reaches world top of 4.5 million tonnes. The firm tries to follow growing demand in Asia through partnership with Nisshin Steel.

The chairman Rafael Naranjo Olmedo said to a reporter of Japan Metal Bulletin at site of International Stainless Steel Forum’s director meeting in Tokyo the firm will expand the partnership with Nisshin Steel. He said Bahru Stainless will add hot rolling mill and steel making shop step by step while the time frame will be determined. The joint venture tries to improve the cost competitiveness with the upper stream operations with scrap from Malaysia and Southeast Asia.

Before the upper stream operation, the joint venture will make cold rolled stainless flat steel with hot band from the parent companies. Acerinox supplies around 70% of the required hot band from Columbus Stainless in South Africa while Nisshin Steel will provide remaining around 30% of hot band from Shunan plant in Japan.

The joint venture builds stainless cold rolling mill with 180,000 tonnes of annual output capacity and annealing and pickling line as the first phase starting operation in mid-2011. The firm adds second cold rolling mill to start operation in January-March 2013 and eyes third cold rolling mill to expand the total capacity to 600,000 tonnes. Mr. Naranjo said balance between operation and facility is key factor for the expansion.

Mr. Naranjo said world stainless raw steel output will increase by 10% to around 27 million tonnes in 2010 after the volume decreased by 4% to 24.85 million tonnes in 2009. The firm, which already has plant in Spain, South Africa and USA, tries to follow growing Asian market through the fourth production site for the group when the demand increases in China and Southeast Asia while the demand recovers in Europe and USA.

Acerinox has 40 years relationship with Nisshin Steel since Nisshin Steel provided technical support when Acerinox started the operation. Nisshin Steel has 15.3% share in Acerinox. Nisshin Steel and Acerinox has tie-up in USA through Nisshin Automotive Tubing, which was provided material flat steel from Acerinox’s US base.