Hyundai Steel Co., South Korea's second-largest steelmaker, may spend 2.3 trillion won ($2.4 billion) to build a third blast furnace by 2015 as demand for steel used in cars and ships soar.
The plant, which burns iron ore and coal, may produce 4 million metric tons of steel a year, Kim Soo Min, executive vice president of the Incheon, South Korea-based company, said March 7 by telephone. Output from its first two blast furnaces under construction will start from 2010.
Blast furnaces allow Hyundai Steel to make automotive steel and heavy plates used in ships and compete with rival Posco as demand increases. The move also paves the way for BHP Billiton Ltd. and other mining companies to sell more iron ore and coal to Hyundai Steel.
``It is a business that's worth trying in the longer term,'' Kim Gyung Jung, an analyst with Samsung Securities Co., said in Seoul. ``Global steel demand will continue to grow led by Asia and the Middle East. In addition, the company's affiliate Hyundai Motor will need steel at a steady pace.''
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