Kobe Steel to Expand Steel Powder Output by 15% in 2011

Kobe Steel expands the production capacity of Takasago steel powder plant in Hyogo by 15% to monthly 7,500 tonnes in September 2011. The firm increases the output capacity of New Segregation-free Steel Powder, SEGLESS by transferring the facility from US plant. The firm tries to follow growing demand for automobile and construction machinery and export through the 300 million yen of investment. The firm also develops new products with properties including higher strength and better workability to serve lighter vehicle weight.

Kobe Steel with around 35% share of domestic steel powder market makes atomized steel powder from electric furnace steel making to water jet processing. The firm reduces the powder at the reduction furnace and mixes with nickel, copper and alloys. The firm clears bottleneck of downstream handling facility through works in March and September 2011 to increase the output by monthly 1,000 tonnes.

The firm moves SEGLESS making facility from US plant, which was closed in June 2009, to Takasago plant. The firm increases the SEGLESS output by monthly 1,000 tonnes to 2,800 tonnes for the product, which is the original high performance product without graphite segregation by putting graphite on the surface of the steel powder. With the expansion, SEGLESS represents more than 30% of the total output.

Kobe Steel’s steel powder production hit bottom in January-March 2009 when the production was less than 40% of the peak in first half of 2008. The production recovered 80% of the peak in July-September and 90% in October-December 2009. The production reached almost full capacity of monthly averaged 6,500 tonnes in April-June 2010. The firm decided to expand the capacity to meet growing demand when the company manages the tight delivery schedule to meet the higher demand.

The demand increases especially for export to Asia when Southeast Asian users increase the vehicle and motorcycle output to serve local market and to export the parts to Indian market. Kobe Steel expects the export rate will increase from current near 30%.

Kobe Steel serves Chinese users mainly for local sintered parts makers, which ships the parts mainly for Chinese appliances makers. Kobe Steel sees the Chinese users are in adjustment in July-September while the firm expects the powder plant keeps full capacity operation in second half of the year when construction makers increase the output and the demand increases seasonally for body warmers with steel powder.

The firm tries to develop new powder products with magnetic property and to increase the sales for hybrid vehicle and electric vehicle while the firm now provides high performance products mainly for sintered parts, which used in engine and transmission of vehicle and automatic transmission camshaft and electronic parts.