MT Arcelor Mittal New

Korean steelmaker, POSCO (PKX), at its recent board of directors meeting announced its recent investment plans. Apart from increasing its production capacity, the company intends to generate 1.25 million man-days employment opportunities by 2013.

The company will work toward the development of the fourth FINEX plant, the third wire rod plant and a new stainless steel plant. Construction of the FINEX plant with 2 million tons of production capacity is expected to commence in June 2011 and consummate by 2013.

The company is keen on increasing its cost competitiveness of producing molten iron by depending much on the FINEX process. The new green process of steel production helps reduce facility investment costs by 20% and operation costs by 15%.

Moreover, the FINEX plant output will meet the demand for molten iron by the company’s fourth wire rod plant and 400 series stainless steel manufacturing facilities. The fourth wire rod plant will have an annual production capacity of 700,000 ton; its construction will be over by May 2013.

On the same day, POSCO announced the completion of the construction of its new 2 million-ton thick steel plate plant in Gwangyang Steelworks. With  the completion of the plant, there is a marked improvement in POSCO’s annual steel plate production capacity, taking it up to 7 million tons, the largest in the world.  The company has outpaced JFE Steel, which had thick steel plate manufacturing capacity of 5.5 million tons.

POSCO’s relentless focus on regional diversification, self-sufficiency in raw materials and higher proportion of value-added products in its product mix are encouraging attributes. Recently, the company’s much-awaited $12 billion Orissa project, involving an integrated steel plant with 12 billion tons of annual capacity and a port in Orissa, received conditional approval.

For fiscal-year 2011, POSCO expects consolidated revenue of around KRW 66 trillion while the company’s revenue is targeted to reach KRW 36 trillion.  It is anticipated that product sales would amount to a total 34 of million tons and crude steel production would yield 36 million tons. Consolidated investments are likely to be KRW 9.8 trillion with the company’s investments totaling KRW 7.3 trillion. The company targets to save costs amounting to KRW 800 billion.

Rising competition and higher raw material costs, on the other hand, remain the prime causes of concern. The company faces stiff competition from Arcelor Mittal (MT) and Nippon Steel Corp.

We currently maintain a Neutral recommendation on the stock.

Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Set 2024 a Ott 2024

Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Ott 2023 a Ott 2024