POSCO’s Vietnam Cold Mill to Reach Full Capacity Operation in 2011

POSCO’s Vietnamese cold rolling mill, POSCO Vietnam plans to reach annual 1.2 million tonnes of full capacity operation in 2011 after 1 million tonnes of production in 2010. The firm tries to expand the sales volume gradually along with the recovery in Vietnamese and Southeast Asian steel market while the firm develops new local users for high grade cold rolled flat steel and full hard products of automotive and motorcycle applications.

The plant, for which Mitsubishi-Hitachi Metals Machinery provided the continuous pickling and cold rolling mill and continuous annealing line, started the official operation on Monday after a month of test production. The plant will supply cold coil to Southeast Asian market through service centers in Vietnam, Malaysia, Thailand, Indonesia and Philippines.

Vietnamese flat steel demand decreased since late 2008 due to worldwide financial crisis. World Steel Association expects apparent steel consumption will decrease by 20% to 6.82 million tonnes in the country in 2009 from 2008. POSCO Vietnam is already prepared for full capacity operation depending on the market.

Traditional cold rolled flat steel suppliers are Phu My Flat Steel, which is a group company with annual 400,000 tonnes of output capacity of state run Vietnam Steel, private owned Hoa Sen with 180,000 tonnes of capacity and Sun Steel with 120,000 tonnes capacity. The country depends on import for cold rolled flat steel supply when the cold flat steel demand is estimated to be annual 1.4 million tonnes. POSCO’s mill can improve the self sufficiency of the products in the country. However, the competition could be severer when Hoa Sen plans expansion and cheap import increases from China.