Steelmakers spending on facilities

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Steelmakers spending on facilities

Korean steelmakers will make bigger investments than last year as part of an attempt to overcome a slump.

According to a survey conducted by the Korea Iron & Steel Association (KISA) released Monday, the nation’s 36 steel businesses including Posco, Hyundai Steel and Dongkuk Steel, have planned to make total investments of 4.14 trillion won ($3.83 billion) this year, particularly in upgrading plants and equipment, which would be an 18.6 percent rise from 2014’s 2.49 trillion won.

Major investments in improvements cited by KISA includes repairing old machines at Posco’s Gwangyang plant, which will require about 102.3 billion won, and the expansion of the Gunsan plant by SeAH Besteel, which will cost about 300 billion won.

KISA said about 50 percent of the investment by steelmakers will be used to repair and maintain existing facilities, while only about 632.9 billion won will be invested in research and development, which would be a 4.7 percent rise from last year’s 604.6 billion won.

“It looks like steelmakers are trying to improve their product quality instead of increasing production as the industry has been influenced by oversupply of Chinese products,” said a spokesman for KISA.

Due to decreased demand from construction and shipbuilding, as well as the oversupply of cheap Chinese products, total production for crude steel in February hit its lowest mark in 18 months at 5.09 million tons.

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