Hyundai Steel Grabs $2 bln Export Medal

Trade Day recognizes the steel maker’s potential to grow further when its blast furnace steel plant is completed

Hyundai Steel Co., an affiliate of Hyundai-Kia Automotive Group, won the $2 billion Export Tower medal at the Trade Day ceremony for exporting more than $2 billion worth of its steel products in 2008.
The second largest steel mill in the country recorded shipment of its steel products mostly steel rods and H section shape steel was up 4 percent more than previous year. In 2005, the steel mill exported steel products valued at $500 million and the shipment escalated to $1 billion in 2005 and to $2 billion last year.
Despite the economic slump sweeping the world from the second half of last year, the steel company shipped $903 million worth of H section shape steel, $240 million worth of steel rods and $240 million worth of hot-coil steel as a result of its continuous exploration of markets for its products to such regions and countries as Southeast Asia, and China, among others.
Hyundai Steel traces back to 1953 for its beginning to Daihan Heavy Industrial Corp. and has been making a huge contribution to the development of the nation’s steel industry. In 1962, the company was privatized and took over by the Hyundai Group in 1978. In 2001, it became a member of Hyundai-Kia Automotive Group after merging with Kangwon Industry and Sammi Special Steel in 2000 and Hanbo Steel in 2004 with steel plants in Incheon, Pohang and Dangin.
Six of its steel products such as H section shape steel, steel rods, and cold-rolled steel, among others, getting the marks of world best products from the Ministry of Knowledge Economy for their outstanding qualities, the largest such products owned by a steel producer the steel industry.
Currently, the steel maker is building a blast-furnace steel mill with its first blast furnace expected to online in April, next year, to turn out 8 million tons of crude steel annually, with the production generation effect of 13 trillion won, providing jobs to 93,000 workers from the construction of the steel plant and 11 trillion won in production generation effect when the steel mill goes online, creating jobs for 78,000 workers, a huge contribution to the national economy.
A little more than two years after breaking ground, Hyundai Steel is coasting toward erecting its first-ever integrated steel mill, feeding a more stable and cheap supply to parent Hyundai Motor ― and breaking POSCO’s monopoly in the local market.
Targeting annual production of 4 million tons by next year and 8 million tons by 2011, the country’s second-largest steel firm’s capacity, at first glance, is tiny compared to rival POSCO’s 33 million tons.
However, experts say there is more behind the numbers.
“Hyundai Steel is going to fall far behind POSCO in terms of production and quality at first, but the significance is that Hyundai’s crude steel production is actually going to prompt competition in the market,” said Cho In-jae, an analyst at KB Investment & Securities.
The lack of blast furnace facilities has led to a chronic shortage of steel here, which has consequently forced domestic industrial manufacturers to import 26 million to 29 million tons of steel per year, according to the Korea Iron & Steel Association.
Currently, POSCO is a primary supplier of steel products for Hyundai Heavy Industries, the world’s No. 1 shipbuilder, and Hyundai-Kia Automotive Group, the world’s fifth largest carmaker.
“Our main goal is to fulfill our own steel needs,” said Hyundai Steel spokesman Park Chun-tak, who explained that of Hyundai’s 8-million-ton production, 6.5 million tons will be used to make steel sheets for automobiles. Eight million tons of steel is enough to make eight million cars.
Hyundai Steel is likely to continue to beef up its production for a larger piece of the market, beyond supplying its own needs.
After seeing progress from its first and second blast furnaces, Hyundai says it plans to build a third one by 2015, increasing the total annual production capacity to 12 million tons.
“Our goal isn’t to steal POSCO’s position, but we are going to try to get up to speed with the market leader,” said Park. nw

A group of executives of Hyundai Steel Co. is lined up for a photo session at the 46th Trade Day ceremony held at COEX in southern Seoul where the company won the $2 bln Export Tower.