Dragon Steel’s Upstream Fuels China Steel Group’s Downstream Expansion

Dragon Steel of Taiwan, which is subsidiary of China Steel, started no.1 blast furnace at the new integrated steel plant on Friday. After the start of the first phase with annual 3 million tonnes of raw steel output capacity, the firm starts no.2 blast furnace in December 2012. The new capacity contributes to higher China Steel group’s production at 18 million tonnes in raw steel and 20 million tonnes in steel products.

Dragon Steel invests around 110 billion New Taiwan dollar for no.1 blast furnace and hot strip mill and the total investment is 200 billion NTD including the second phase. The firm supplies steel source for the group companies including new down stream operations in Southeast Asia while China Steel keeps purchasing more than 1.5 million tonnes per year of slab from Sumitomo Metal Industries’ Wakayama works.

The chairman Chang Chia-Juch of China Steel said at the blast furnace firing ceremony the new furnace is symbol of the new milestone to meet domestic demand for high valued steel products. The president Tsou Jo-Chi of China Steel expects the new blast furnace contributes to the expansion of the group’s downstream operations including China Steel’s new no.3 cold rolling mill and wire rod mill.

Mr. Tsou said to a reporter of Japan Metal Bulletin he tries to improves the group’s competitiveness especially for raw materials cost through continuous investment in competitive mining assets while he is confident for the production cost. He also focuses on better products mix by increasing sales for differentiated products through closer tie-up with the automakers and other users.

Mr. Tsou said another mission is to transfer accumulated technology and knowhow from expert to next generation. He said the China Steel group tries to improve the control of carbon emission and environmental impacts through potential tie-up with major offshore makers including Sumitomo Metal Industries of Japan and Baosteel Group of China.