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Foreign steelmakers study Philippines' potential

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Foreign steelmakers such as Baosteel, China Steel Corp (CSC) and Posco are studying the possibility of setting up plants in the Philippines, according to the Philippine Iron and Steel Institute.

“In the past year, there has been some interest from Baosteel, China Steel Corp and Posco for the possibility of having a presence in the Philippines. They are looking for market opportunities,” its president Roberto Cola said.

“But so far, nothing has materialised yet,” he said.

Among the three, only Baosteel does not have a presence in the Southeast Asian region.

CSC will start its 1.2 million tpy cold rolled coil joint venture mill with Sumitomo Metal Industries – the China Steel Sumikin Vietnam (CSVC) – in Vietnam in 2013.

CSC also fully owns and operates CSC Steel, Malaysia’s largest CRC mill.

Meanwhile, Posco is in a joint venture with Indonesia’s largest mill Krakatau Steel to build a 6 million tpy blast furnace as part of its $2.7 billion integrated mill plan.

The first stage of production will be commissioned in late 2013, with capacity of 3 million tpy of slab, hot rolled coil and plate.

The Philippines will especially welcome companies that are interested in developing its flats sector, Cola pointed out.

“Global Steel Philippines (the only hot rolling mill in the country) has stopped operations for more than a year. Flats products is the area where foreign expertise can come in and will be much welcomed,” he said.

Global Steel Philippines Inc (GSPI) stopped operations in mid-2010 because of financial problems, sources said.

Its spokesman Sangram Mohanty declined to comment.

At full capacity, GSPI’s facility in Iligan City is the largest in the Philippines, with a 1.2 million tpy hot rolled coil mill, 900,000 tpy CRC mill and 300,000 tpy plate mill.

Since GSPI’s stoppage, the Philippines has been depending entirely on HRC imports mainly from China, South Korea, and Japan.

Local investments meanwhile have been growing in the long steel sector.

SteelAsia Manufacturing plans to double its rolling capacity to 2.4 million tpy by 2015, while boosting billet output by 900,000 tpy.

TKC Steel is also commissioning a 2 million tpy blast furnace this year.

In addition to those, Pag-asa Steel Works is adding a 400,000 tpy rolling mill by 2014, Cola said.

Philippines consumed 5.1 million tonnes of longs and flats in 2011, up 24% from 2010. The figure surpassed its pre-2008 crisis consumption of 4.5 million, thanks to the country’s robust construction sector.

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