South Korea’s Posco officially commissioned its new 3.3 million tonnes/year hot strip mill at its coastal Gwangyang works at the end of last week. The company is eyeing export to its re-rolling subsidiaries abroad as a way of ensuring its margins against the encroachment of Hyundai Steel on what was once Posco’s dominant position, Kallanish notes.

The new No. 4 hot strip mill can produce HRC 1.2-22mm thick and 700-1,950mm wide and will be focussing largely on high-end automotive products, the company says. Local sales will be limited as most HRC will go to overseas re-rolling subsidiaries, it adds.

Posco has 1.8m t/y of cold rolling capacity at its Posco-Maharashtra Steel subsidiary in India and another 1.2m t/y at its Posco-Vietnam plant in southern Vietnam. The latter is 15% owned by Japan’s Nippon Steel and Sumitomo Metal Corp.

The Korean autosheet market has been reshaped dramatically by the rise of Hyundai Steel’s flats capacity in recent years. Hyundai has captive demand due to its relationship with Hyundai Motor and its subsidiary KIA Motor, Kallanish notes. Hyundai’s profit margins overtook Posco’s for the first time in the second quarter of 2014, reaching 8.6% against Posco’s 7.6%.

Posco is now undergoing its own restructuring to boost its margins, divesting its Special Steel division to SeAh Group and focussing on its core high-end flat steel products.