Last Update: 30/09/2006 12:05:47 Bloomberg - Posco, the world’s fourth-largest steelmaker, aims to double production to 60 million tonne (mt) within 30 years to increase its pricing power over prices of raw materials and products. Chairman Lee Ku Taek said Posco needs to add 30 mt of capacity overseas to match its domestic output of 30 mt in a speech to employees posted earlier on Thursday on the Pohang, South Korea-based company’s web site. The speech, originally made September 22, was removed from the site. Demand from steelmakers in China, the biggest buyer of iron ore, may allow suppliers such as Rio Tinto Group and BHP Billiton Ltd to win a fifth straight annual rise. Iron ore jumped 19% this year to a record and may rise another 10% next year, Goldman Sachs JBWere Pty said September 27. ‘‘By achieving annual production capacity of 60 mt, Posco can have an influence on steel product prices,’’ said Park Sang Kyoo, an analyst at Hyundai Securities Co in Seoul. ‘‘Posco can control steel oversupply by cutting production without losing market share.’’ Park said the speech by Lee, which highlighted Eastern Europe, Southeast Asia, Mexico and Brazil as potential areas of expansion, also indicated that Posco might be under negotiations to buy stakes at one or two steelmakers in China. Posco now can produce 31 mt of steel a year in Korea and is building a steel plant with 12 mt of annual output capacity in India. Arcelor Mittal, the world’s top steelmaker, and its Japanese rivals Nippon Steel Corp and JFE Holdings Inc are also seeking to expand operations in growing markets, such as China and India, the world’s fastest-growing major economies. “It’s difficult to expect considerable growth in the domestic market,’’ which is saturated, Posco’s Lee said in the speech. ‘‘Our biggest target is to globalise,’’ he said.
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