Posted on 15 Feb 2023
South Korean mini-mill Daehan Steel has announced the conclusion of a deal with German engineering firm SMS Group to build a new 1 million tonnes/year steel plant for its subsidiary YK Steel in Dangjin on Korea's west coast. The future of YK Steel's existing works in Busan in the country's southeast corner remains unclear, however.
Under an agreement signed last October but only now made public, SMS is to supply a new mini-mill "with integrated melting, casting and rolling and including all electrical and automation systems" to YK Steel's Dangjin site, with production starting in 2025.
"Instead of relocating and upgrading an existing plant, originally planned at the end of 2021, YK Steel instead opted for a completely new mini-mill," SMS explained in a statement.
YK Steel, owned 70% by Daehan and the balance by Japanese heavy sections maker Yamato Kogyo, currently hosts 930,000 t/y of steelmaking capacity and 1.18 million t/y of re-rolling capacity at its Busan works. However, as the port city has expanded, so the company's operation in recent years have been increasingly targeted by local residents for noise and pollution, as Mysteel Global has reported.
In 2020 when Daehan bought into YK Steel, the plan in train was to relocate the Busan works to Dangjin on Korea's west coast, about 80 kms south of Seoul and not far from Daehan's existing Pyeongtaek rebar works.
In January last year, SMS announced an agreement with Daehan for "the mini-mill modernization and relocation for YK Steel," under which Dusseldorf-based SMS would be supplying a "re-engineered" meltshop with a new 115 tonnes EAF, a new 5-strand billet caster and an 18-stand "relocated" bar mill with a new 140 tonne/hour walking beam furnace, as Mysteel Global reported.
The plant details just announced are almost the same as those announced by SMS earlier, including the 115 tonnes DC furnace and five-strand billet caster. However, the 18-stand bar mill is no longer "relocated" but will be new.
The significance of the announcement is that YK Steel will be acquiring a new state-of-art integrated steel mill for Dangjin, which raises the intriguing question of what YK and Daehan might have planned for the Busan works.
Until last summer, Korean industry media had frequently reported that the Busan plant was to be relocated -- with end-2024 being the target deadline. Whether the Busan works' existing facilities were to be disassembled and some rebuilt at Dangjin and others perhaps sold as second-hand equipment or merely scrapped, was not unclear.
If an entirely new works is to be built in Dangjin, production could continue at Busan a little longer.
Source:Mysteel Global
