South Korea’s leading steel manufacturer POSCO has signed an agreement with Saudi Aramco on exploring the potentials of setting up an integrated steel plate mill. The Korean steelmaker will conduct a feasibility study on the commercial viability of the steel plate mill project, whose output will mainly be supplied to the booming oil and gas industry.
It must be noted that the country has no operating steel plate mill, which implies that all of its domestic requirements are satisfied through imports. The setting up of a plant domestically would be beneficial for the domestic market. However, the economic feasibility of the project is still under doubt, mainly on account of demand concerns. The country had accounted for only around 14% of the total steel plate demand in the Middle East and Africa region.
This is not the first attempt by the country to build an integrated steel plant. Earlier in 2018, it had signed a Memorandum of Understanding (MoU) with Nippon Steel and Sumitomo Metal Corporation (NSSMC), Sumitomo Corporation and Sumitomo Corporation Saudi Arabia to conduct feasibility study. In addition Sabic Hadeed- the country’s largest steel producer had planned to build a 1.5 Mtpa steel plate mill, but it was later abandoned due to crash in oil prices and ongoing weakness in steel market.
