POSCO to Raise Output Rate of 400 series Stainless to 40%

POSCO, South Korean largest steel maker, plans to increase the output rate of 400 series stainless steel products to 40% in 2010 from current 35%. The demand for 400 series products is firm from automobiles and electric appliances while the demand for 300 series products maintains low from dealers and common consumers. POSCO forecasts Pohang iron works’ crude steel output for stainless steels at 1.4-1.8 million tonnes in 2010. The firm seeks a chance for price hike eyeing the supply and demand balance in order to improve profitability.

Mr. Young-Sea Suh, POSCO’s managing director and general manager of the stainless marketing department, approved an interview by Japan Metal Bulletin in Seoul on Monday and explained POSCO’s management plan of stainless steels in 2010. Mr. Young showed a concern that Pohang’s operation rate might become 75-80% in 2010, as low as in 2009, in the worst demand condition.

POSCO eyes Pohang iron works can keep full production for stainless steels at 140,000-150,000 tonnes per month by increasing 400 series products. Meanwhile, Mr. Young said the output would decrease by 20,000-30,000 tonnes per month from the full production for January-February because of the non-demand season and the iron works’ electric furnace refinement.

Mr. Young said Pohang iron works will keep flexible production adjusted with the order volume after March. He said POSCO aims to raise the selling price to reflect high stainless scrap and chrome price. The firm will announce the hike as soon as at the end of January.

Mr. Young also pointed out the price impact by cheap import products. Import products accounts for about 50% in South Korea’s domestic demand at about 1.1 million tonnes per year.