Chairman Kwon Oh-joon of POSCO. 

POSCO will be able to export its Finex steel production technology to China as early as next month, steel industry sources said recently. A new Chongqing Steel plant being built in China need the approval of the Chinese government to import the Korean steel maker’s unique steel production technology. 

Government approval is expected to come next month when the Chinese parliament convenes its spring sessions.  

The Korean steel maker giant has already completed its survey on the feasibility and environmental conditions for the Chinese steelmaker to install the technology and put it into use at its steel plants.  

Steel industry sources close to the situation said the working-level study on POSCO’s steel making technology has been completed and only thing left is for the Chinese government to sign the approval papers prepared by NDRC on imports of the Finex steel production technology.

The sources said the possibility is high for the Chinese government to sign the papers in March when the two parliaments in China begin their spring sessions. 

The Chongqing Steel plant is a 50/50 joint venture between POSCO and Chinese investors. It will have an annual capacity to produce 1.5 million tons of steel. The integrated steel complex includes two Finex steel plants connected with CEM, a high-tech three dimensional steel production process. CEM stands for Compact Endless Casting and Rolling Mill. The joint venture partners plan to invest a total of $3.3 billion to build the steel complex. 

POSCO has the rights to name the CEO of the new steel complex and appoint a majority of its board. 

POSCO will also get from 3 to 5 percent of its investment for the use of Finex technology at the new steel plant annually and also for teaching the know-how to use the technology.

The export of the Finex steel technology is only the beginning for POSCO’s foray into steel production technology in China. China produces 750 million tons of steel annually and as little as 300 million tons come from small steel makers in the inner regions of China, with 90 percent of them using coal and cheap iron ore, which are all part of the market for the Finex steel technology. The project shows it would take at least 600 years to install the Finex technology at all of those steel plants in the inner regions in China.

The market for the Finex technology is slowly opening up in such places as India and Southeast Asia with steel plants. The Middle East is also ready to be a market for steel production technology. Countries like Iran, Thailand and Vietnam have sent inquiries to POSCO on imports of the Finex technology.

The Finex steel production technology’s advantages include natural coal and iron ores that can be used without processing to produce crude steel, while traditional technology has to turn coal into cokes and clean iron ores before they are put into blast furnaces, reducing pollutants and costs for the crude steel production by around 15 percent than the traditional blast furnaces. Cheap iron ores in powders can be used at the Finex steel production, while the traditional blast furnaces need iron ores in hunks, more expensive and their reserves are being dried up.

The Finex technology also reduces the exposure of Sox by 40 percent and NOx by 15 percent compared to the traditional blast furnace technology.

A view of a POSCO steel plant in Gwangyang, S. Jeolla Province.(Photos:POSCO)