(LEAD) S. Korean steel firms to cut capital spending 31 pct this year

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SEOUL, Jan. 7 (Yonhap) -- South Korean steelmakers, led by POSCO, plan to spend
around 6.96 trillion won (US$ 6.15 billion) this year to upgrade and expand
facilities, down 31 percent from last year, an industry association said
Thursday.

POSCO and other local steelmakers are expected to further slash their spending to
5.84 trillion won next year and 5.9 trillion won in 2012, according to the Korea
Iron & Steel Association.
In 2008, their capital spending reached 7.1 trillion won.
Local steelmakers sharply increased their capital spending, estimated at 10.1
trillion won, last year on expectations that steel demand will increase down the
road on rising demand from automakers and shipbuilders.
But most large-scale projects have been completed. Hyundai Steel Co., the
country's second-largest mill, began operating its first blast furnace earlier
this week. Other steelmakers completed their plants last year.
The association expected that steel demand in South Korea will increase 12
percent to 51.4 million tons this year on strong demand from carmakers and
appliance manufacturers.
The local steelmakers expect exports of steel products to increase $2 billion to
$25 billion this year, according to the association. Steel imports will decline
2.8 percent this year, it forecast.
sam@yna.co.kr
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