Chinese steelmaker Baosteel has recently increased its plate production capacity to at least 2.5 million mt/year in an effort to boost sales in the current difficult economic climate, and to use up raw materials, Platts has learnt from a source at Baosteel's international trade department.

 

The increase in Baosteel's plate production capacity will come from its newly-completed Luojing plant, the source said. With a design hot-metal production capacity of 1.5 million mt/year, the first Corex module went on stream at the end of 2007. The Luojing plant has been designed to produce up to 3 million mt/year of 5-meter-wide ship plate, the Baosteel source noted.

 

In light of Baosteel's existing 4.5 meter-wide plate making capacity of over 1 million mt/year, Baosteel's plate production capacity has thus increased by around 60% in 2008, the source said.

 

Baosteel's ship plate orders turned out to be better than expected in November and the prospect for December and beyond was not bad, the Baosteel source noted. "Big orders can at least help Baosteel absorb its high raw material stocks," he added.

 

Baosteel's stocks -- including finished steel and raw materials – are believed to have reached a combined value of around Yuan 50 billion ($7.26billion); its finished steel stocks are estimated to have reached 2 million mt.

 

Back in May 2008, Baosteel signed a strategic cooperation agreement with Korea's shipbuilder Hyundai Heavy Industries for long-term ship plate supplies to an annual tonnage of 0.3-0.5 million mt in the next two years, as reportedby Platts. As such, Baosteel's ship plate supplies will be representing around 10% of Hyundai Heavy Industries' total ship plate need in the next two years.

 

The Korean shipbuilder's ship plate demand is expected to reach 3.9 million mt in 2008 and 5 million mt in 2010. –Platts