POSCO, Hyundai Steel compete in expanding CGL production lines

25 November 2015

Competition for expanding the continuous galvanizing line (CGL) to produce second hot-dip galvanized steel sheets, which are used for luxury cars, is becoming stronger. The CGL is a facility to produce such high quality auto steel sheets. In Korea, only POSCO and Hyundai Steel have the CGL.

Hyundai Steel announced on Nov. 19 that it has recently started trial production of the CGL line in the second cold rolled coil plant in Dangjin, South Chungcheong Province, the construction of which began in August. Also, it will start commercial production early next year. Accordingly, the CGL line with an annual production capacity of 500,000 tons will be added, which will increase the total auto sheet production capacity of Hyundai Steel’s second cold rolled coil plant in Dangjin to 2 million tons. When combined with its first cold rolled coil plant, the company will have an annual production capacity of 5.5 million tons.

Hyundai Steel will also begin additional operations of 12 hot stamping facilities in Yesan, South Chungcheong Province, in February next year. These facilities are usually used to manufacture products that have low elongation rates among auto steel sheets but are needed to maximize the strength.

With the latest CGL line extension, Hyundai Steel will narrow the gap in auto steel production to 3 million tons between POSCO, with an annual production capacity of 8.5 million tons next year.

Earlier, however, POSCO has begun the construction of 7CGL with an annual production capacity of 500,000 tons in the Gwangyang plant in South Jeolla province in September. Therefore, the gap is expected to widen again. With the extension, POSCO resumed the CGL construction in five years. As the company will also sequentially build more CGL lines in Thailand and China, it will increase an annual production capacity of auto steel sheets to 10 million tons by 2017, eluding pursuit by Hyundai Steel.

In 2013, Hyundai Steel accounted for 50 percent in auto steel sheets supply to Hyundai Motor Group, while POSCO accounted for 40 percent. Last year, however, Hyundai Steel increased the figure to 60 percent, decreasing the figure of POSCO to 30 percent.