POSCO Sees a Winner 2 Months After FINEX Kickoff
By Jane Han
Staff Reporter
Nearing two months since commencing its revolutionary iron-making FINEX technology, POSCO has successfully reached 95 percent of its Pohang-based plant’s full capacity, at the same time eyeing overseas expansion of its next-generation furnace.
The plant, whose test run began mid-April, went into full-operation on May 30, and the company’s senior executive vice president Lee Dong-hee confirmed in a statement last week that the facility is working up faster toward its full capacity than expected with a daily production output of 3,800 to 4,000 tons of steel.
The full operation of FINEX has brought the number of domestic furnaces run by POSCO to 11, including nine blast furnaces and one foundry blast furnace. The company churned out 31.8 million tons of steel products in 2006, with sales hovering at 20 trillion won.
FINEX technology has been hailed as a landmark turning point for the global steel industry as it is the only significant commercially successful technological leap made in the past 100 years to overcome the shortcomings of the traditional blast furnaces.
While leading steel makers have been competing to develop new technologies to replace their aging equipment, POSCO’s environment-friendly method _ co-devleoped with Siemens _ stood up as paving the way for innovational steel production.
FINEX produces molten iron ore directly using iron or fines and non-coking coal, which not only eliminates the costly preliminary stages of sintering and coke making, but also cuts toxic emissions to only about 10 percent of current levels. The new method is also expected to save significant amounts of energy needed to make thick slabs thinner and heat pressure process by eliminating them.
The steel producer can also utilize abundant low-grade coal fines, which has been traditionally used only for generating electricity.
``FINEX will make a great contribution to POSCO’s competitiveness amid mergers by major global steel makers and heightening competition among smaller players,’’ said POSCO CEO Lee Ku-taek during the dedication ceremony for the steelworks in Pohang in May.
The Korean steel giant has worked a long time to set the milestone, as it began laboratory testing of the process in 1992, producing 150 tons of hot metal a day since the completion of a pilot plant in June 1999. And later in May 2003, a 600,000-ton-a-year demo plant was completed.
The construction for the Pohang plant began in 2004, costing a total of 1.06 trillion won ($1.14 billion) for completion. Prior to the ground breaking, POSCO and the Ministry of Commerce, Industry and Energy spent a total of 58.2 billion won from 1999 to 2000 to sketch out the technology.
The annual production capacity of 1.5 million tons from the highly-efficient plant comes at a cost that’s about 20 percent less than conventional methods.
With the plant’s successful operation and continuously robust domestic and international demand for steel, POSCO plans to replace its old equipment in Pohang and overseas facilities with the new steel mills, which will increase capacity and efficiency.
``The company is leaving its consideration open to transfer the technology _ only if it gets in return rights of management,’’ said a company spokesman.
A POSCO executive was recently quoted as saying that several Chinese companies have asked that the steel maker export the FINEX technology and the company has requested them to submit official proposals to define the collaboration.
``Some have sent proposals and other have promised to send them,’’ a local daily said last week.
Industry figures are speculating that POSCO is leveraging the FINEX method to gains stakes in Chinese steel makers which is prohibited, as current Chinese regulations ban foreign ownership of local steel companies.
``Possibilities are kept open, but there are no detailed plans for collaboration at this point,’’ said the spokesman.
Vietnam and India are other overseas sites for the FINEX plant to be built.
POSCO President Yoon Seok-man said during the dedication ceremony in May that the steel group plans to build mills using the latest technology in China, India and Vietnam within the next 10 years, which is to help the company emerge as a global steel maker with an annual production capacity of more than 50 million tons.
``The feasibility study to build an integrated steel mill with Vietnam’s largest shipbuilder Vinashin is still going on,’’ said the spokesman, adding that it will end within this year and if the results are positive, the new mill will be built under the FINEX method.
And as for the India plant, the new technology is set to be used as soon as POSCO gets construction clearance from India’s central government.
``It’s only been just two months since the new plant went into full operation,’’ he said. ``But we’re glad that no unexpected problems have risen and things are going smooth so far.’’