POSCO is expanding the production facilities for its steel plates for use in automobiles under a strategy to overcome the slowdown in the global steel industry by turning out more high value-added steel products.
Under the strategy, the steel maker has been building additional production plants for the steel plates to be used in automobiles and galvanized steel sheets for automobiles.
The steel maker is also building a steel rod plant in the Port of Indiana-Jeffersonville, in the U.S. that will be capable of producing 25,000 tons of CHQ wire for bolts, knots and shafts for automobiles. POSCO is investing $19 million in the project.
The project includes a 136,000-square-foot facility to be constructed on approximately 10 acres at the port site. POSCO plans to start construction this spring on the facility, which will be the company's second steel processing line and fourth production line in the U.S. Motivating POSCO to locate at the port included the ability to ship steel to the Midwest by water, the close proximity to numerous steel and automotive-related companies and the attractive business environment in the Jeffersonville area. The wire rod processing center at the Port of Indiana-Jeffersonville, is projected to create up to 60 high-wage jobs by 2018.
POSCO is building a galvanized steel sheet plant in Thailand with the annual capacity to produce 450,000 tons of galvanized steel sheets. They will be supplied to auto plants and auto part makers in the country.
POSCO also is building a high tensile steel plant in its Gwangyang Steel Complex in South Jeolla Province in Korea for use in luxury brand cars. The tensile steel sheets are lighter and stronger than the usual steel plates and the demand for the new steel sheets is rising fast among automakers around the world.
The steel maker has steel plate plants that are in operation in a number of countries abroad. The company has plants in Chengdu and Chungqing that are turning out steel products for use in autos, with the Chengdu plant turning out 170,000 tons of auto steel plates annually, while Chungqing plant turns out 140,000 tons of auto steel plates annually.
An official of the steel maker said they built the plants in those cities in China as they are the center of the country¡¯s auto industry. The official added that the company plans additional steel plate plants in the region to expand its market share for steel plates for autos in China.
POSCO is considering more steel plates for autos to cover the sluggish steel industry sweeping the world by producing more high value-added steel products. The steel maker has been producing steel plates for autos since 1992.
Chairman Kwon Oh-joon said the general steel products are in a slump, but not so for steel sheets for autos. Demand for the latter has grown fast in the past several years. China¡¯s auto products came to 24 million units in 2015, but the number is projected to hit 35 million in 2020 and POSCO is not about to lose the opportunity to expand its market share for the steel plates for autos in China.
POSCO sold 8.7 million tons of steel sheets for autos in 2015, far higher than the 6.56 million tons it sold in 2010, and plans to expand production to 10 million tons in 2018. The steel maker¡¯s share of its steel sheets for autos came to 25 percent of its total steel output in 2015, the highest among global steel makers, including Accelor-Mittal, New Nippon Steel and Sumitomo Metal.
A POSCO official recalled that the company has supplied hot coil steel to auto makers in Korea since 1973, and began to supply fully steel sheets to them in 1992 under a strategy to continuously expand its steel sheets output.
The design of a sedan to use lighter and harder steel sheets for autos produced by POSCO under its strategy to produce more high value-added steel products.(Photos:POSCO)