Economy, Business And Markets

South Korean Co. to Decide on Steel Project

South Korean Co. to Decide on Steel Project South Korean Co. to Decide on Steel Project

South Korea’s POSCO is expected to complete by next month a feasibility study for the construction of a steel plant in Iran.

The company signed a memorandum of understanding aimed at producing value-added flat steel with the Pars Kohan Diyar Parsian Steel Complex (PKP) back in May, concurrent with South Korean President Park Geun-hye’s visit to Tehran.

Within the framework of the MOU the Korean firm is to supply its FINEX technology. POSCO will have an 8% stake in PKP, if it decides to go ahead with the project.

FINEX is the name of an iron-making technology jointly developed by now-defunct Austrian engineering and plant building company Siemens VAI and POSCO. Molten iron is produced directly using iron ore fines and non-coking coal rather than traditional blast furnace methods through sintering and reduction with coke.

Elimination of preliminary processing reportedly makes the plant for FINEX less expensive to build than a blast furnace facility. Additionally a 10-15% reduction in production costs is expected through cheaper raw material, reduction of facility cost, pollutant exhaustion, maintenance of staff and production time.

The prospective joint venture with PKP includes two phases, according to Metal Expert – a Ukraine-based provider of news and analysis for steel products and steelmaking raw material industries. The first consists of a 1.6 million ton-per-year integrated steel mill using FINEX technology for the production of hot rolled coil (HRC). Under the second phase a cold rolled coil (CRC) and hot dipped galvanized coil (HDG) mill of 600,000 tons per year will be built.

 Other Venture

The POSCO-PKP joint venture, however, will not be the only steel project where the South Korean giant plans to participate. It has reached a preliminary agreement worth €1 billion that will offer in Iran its FINEX and Compact Endless Cast and Rolling Mill (CEM) technology. Based on this business model, POSCO will collect royalties from steelmakers using its technology, as well as part of the revenue from orders won by producers using their management systems.

CEM is an advanced process technology that allows mass production of hot-rolled products through a directly connected configuration between one casting line and one rolling line. It operates in both batch and endless rolling modes, which are mutually convertible at any time. The endless rolling mode is selected for thin-gauge products, and converted into the batch rolling mode for thick-gauge products or certain special steel grade products. This convertibility greatly widens the product range of the CEM process, according to POSCO’s website.

POSCO is the world’s fifth-largest steelmaker by production. While European steelmakers have been hit hard by global oversupply, the South Korean group posted a $310 million net profit for the January-March period. It marks a return to the black for the company, which last year reported its first ever loss as a flood of cheap Chinese exports drove steel prices to their lowest level in more than a decade.