onesteel tips higher output as demand picks up

OneSteel tips higher output, as demand picks up

Andrew Harrison From: Dow Jones Newswires November 16, 2009 2:53PM

ONESTEEL has experienced a "small but steady" increase in demand and expects to increase production in the fiscal second half.

Sydney-based OneSteel, Australia's second-largest steel maker, is ramping up output to cater for increasing demand for building products used in government-backed stimulus packages to improve education and transport infrastructure, and in expanding residential construction and mining infrastructure projects, chief executive officer Geoff Plummer.

The company's Whyalla mill, in South Australia, is on track to produce at an annual rate of 1.1 million tonnes over the six months to Decenber 31, Mr Plummer told investors at their annual meeting today.

Its Waratah electric arc furnace is expected to produce 120,000 tonnes over the half and its Sydney and Melbourne electric arc furnaces have been ramped up to operate at about 65 per cent utilisation in the half, he said.

OneSteel expects to boost second-half output by 100,000 tonnes from the first half, subject to continued market improvement and the timing of benefits from government stimulus packages, Mr Plummer said.

The company expects iron ore and scrap prices to remain high by historical standards, underpinned by strong demand from China and a steady recovery in other regions, he said.

Global steel prices and margins are expected to remain affected by capacity overhang, Mr Plummer said.

http://www.theaustralian.com.au/business/mining-energy/onesteel-tips-higher-output-as-demand-picks-up/story-e6frg9df-1225798241426