Posco Asked to Boost Output in Response to Japan Quake

March 22, 2011
Shipbuilders ask for 600,000 metric tons of steel products from South Korean steel producer.

South Korea's top steelmaker Posco said March 22 it has been asked to boost production of shipbuilding plates as a hedge against a possible shortage of key materials from quake-stricken Japan.

The firm said domestic firms last week asked the world's fourth largest steelmaker to produce about 600,000 metric tons of shipbuilding plates and other steel products.

Newspapers said South Korean shipbuilders sought an extra 200,000 to 300,000 tons of production of shipbuilding plates, or heavy thick plates.

"We will try to support them by making the utmost use of our capacity," a Posco spokesman told AFP.

Businesses across Japan have been forced to halt production of much needed components after the March 11 earthquake and tsunami, leading to supply bottlenecks for firms across the region.

South Korean shipbuilders reportedly consume up to 600,000 tons of Japanese steel plates annually, or about 25% of their total use of steel plates for ship construction.

"An increase in domestic sales and future steel demand in rebuilding Japan will likely support second-quarter earnings results," Kyobo Securities analyst Eom Jin-Seok told Dow Jones Newswires.

Copyright Agence France-Presse, 2011

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