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Japanese steelmakers adding high grade steel capacity

Japan's Sumitomo Metal Industries Ltd will invest $790 million to build a new blast furnace as part of a plan with its two allies to boost output of high-grade steel.

Steelmakers led by Nippon Steel Corp, are accelerating investment in Japan to boost capacity after the emergence of ArcelorMittal with three times the output of its closest rival Nippon Steel.

Sumitomo Metal Industries, Japan's third-biggest steelmaker, said it would build a 3,700-square-metre blast furnace to replace an existing one at its Wakayama works in western Japan, bringing the total crude steel output there to 5 million tonnes a year by March 2013.

The additional output of 700,000 tonnes will be shared with Nippon Steel and Kobe Steel Ltd, the three companies said.

That is in addition to the three companies' 2005 pact that Sumitomo Metal will provide 800,000 tonnes a year of crude steel to Nippon Steel and 200,000 tonnes to Kobe Steel after completing another blast furnace with investment of ¥100 billion at the Wakayama works in 2009.

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