South Korea’s Hyundai Steel has been declared the preferred bidder for cold-headed quality wire rod and stainless bar producer Dongbu Special, ahead of pre-eminent Korean special steel firm SeAh Special Steel. The move will make Hyundai Korea’s first integrated specialty steel maker, the company says.

The 300,000 tonnes/year Dongbu was taken over by the state-owned Korea Development Bank (KDB) in June for Won 110 billion ($104 million) as part of a financial restructuring of the troubled Dongbu Group. SeAh Special and Hyundai were the final two bidders after Dongil Industries decided not to bid for the plant.

The Hyundai bid has been reported in local media as being around Won 310-320bn, Kallanish notes.

Hyundai Steel has increased its flats capacity aggressively in recent years. The steelmaker has been secure in the knowledge that it has captive demand in its Hyundai Hysco automotive steel processor and Hyundai Motor and KIA Motor automotive sister companies. It also intends to commission a new 1 million t/y automotive special steel plant in 2016.

SeAh Special has a finished steel capacity of some 500,000 t/y but this is expected to be boosted by the acquisition of the specialty steel unit of Posco, Hyundai’s mainly steelmaking rival. Posco is itself undergoing a restructuring as it repositions itself in the face of Hyundai Steel’s rise.