ThyssenKrupp AG, a German-based steelmaker has entered into an agreement that will finance a study and buy land for a proposed 1.3 billion-euro (approx. U.S. $1.7 billion) steel plant in Brazil that would supply the U.S. and Europe.
ThyssenKrupp signed the agreement with Brazil-based Vale, said to be the world's largest iron-ore producer. "We have taken the plan to build a steel plant in Brazil one step further,'' Erwin Schneider, spokesman for ThyssenKrupp's steel unit, said.
ThyssenKrupp is expanding steel capacity after the company's production reached a record in the fiscal year ended in September 2004. The plant in Rio de Janeiro, Brazil will reportedly produce as much as 4.4 million tons of raw steel a year starting in 2008, ThyssenKrupp said.
Additionally, Luxembourg-based steelmaker Arcelor SA said it plans to spend $3 billion in Brazil by 2010 to make acquisitions and expand operations. Brazil is the lowest-cost producer among the world's biggest steel-producing nations, according to Metal Bulletin.
Steel prices surged last year as global demand grew, led by China, the world's biggest user. European hot-rolled coil for export rose 94 percent last year to $592.50 a metric ton, according to Metal Bulletin. (Bloomberg)
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