Posco to Spend 1.4 Trillion Won to Boost Steel Output (Update1)
By Sungwoo Park
July 17 (Bloomberg) -- Posco, Asia's third-biggest steelmaker, plans to spend 1.4 trillion won ($1.4 billion) to boost production to meet rising demand from shipbuilders and carmakers.
Capacity will expand by 2 million metric tons by 2010, the Pohang, South Korea-based company said in an e-mailed statement today after holding a ceremony to mark the addition of a plant. That's a 6.4 percent gain from last year's output.
Steel prices have surged to records globally as producers haven't invested in enough new plants to keep pace with rising Asian demand. The proposed expansion will increase operating profit by 7 percent from this year, according to Posco.
Posco rose 5,000 won, or 1 percent, to 515,000 won at 11:19 a.m. in Seoul trading today, compared with a 2.1 percent advance in the broader benchmark Kospi index.
Posco will increase annual operating profit by 410 billion won after 2010 as the expansion will boost output of hot-rolled coils, ship-plates and billets, it said.
The company said April 1 it wants to boost annual crude steel output, including overseas production, to more than 50 million tons over the next decade from 31.1 million tons last year.
To me that report can only sound good for metals.
OXR
oxiana limited
