Posted on 06 Apr 2015
South Korean steelmakers plan to expand their facility investment this year despite unfavorable market conditions caused by the slowing economic recovery and a global supply glut, industry data showed Monday.
According to the data by the Korea Iron and Steel Association, 36 steelmakers, including POSCO and Hyundai Steel, plan to spend a combined 4.15 trillion won (US$3.82 billion) on facilities this year.
The amount is 18.6 percent more than the previous year. It also follows a 42.5 percent plunge reported in 2013.
Most of the planned investment is expected to be spent on maintaining and repairing existing facilities, market observers said.
The steelmakers are also expected to invest a combined 632.9 billion won on research and development this year, a 4.7 percent rise from a year earlier, the data showed.
Market experts see the increase as a drive to enhance the level of their product quality at a time when the market is suffering from a protracted economic slump and an oversupply of products, which apparently led to a drop in recent steel production.
In February, South Korean steelmakers produced 5.09 million tons of crude steel, down 4.4 percent from a year earlier.
This marked the lowest level since August 2013, when it churned out 4.89 million tons of crude steel.
