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New Year, New Projects and yet more Overcapacity - 13 January 2010

The opening of Hyundai’s new 4m t/y blast furnace in Dangjin, South Korea is said to be already unsettling other producers in the North Asian region. Producers like Korea’s Posco and Japan’s Tokyo Steel will definitely be observing developments at the new site.

In Europe, most of the key producers are increasing their output, anxious to keep their market share as well as keeping unit costs as low as possible. Riva in Italy and ArcelorMittal are both re-starting furnaces.

Elsewhere, the Maghreb Steel’s new hot strip mill in Morocco, various new units in Turkey and the GPI pipe mill in Oman are all also now coming to fruition.

Looking specifically at crude steel, Steel Business Briefing’s Roger Manser comments, “Although figures like an extra 150m t/y in capacity are circulating, SBB’s own data suggests that announced new capacity will already amount to at least 100m t/y over the next three years, with more expansions being announced every week.”

He concludes, “Producers ramping up existing plants or planning new projects need to bear in mind the importance of matching demand and supply in advance of any decision, in order to avoid overcapacity and soft prices.”


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