Sumitomo Metals Receives Order for Steam Generator Tubes to be Used in Advanced Nuclear Power Plant, and Will Increase Production Capacity

Sumitomo Metal Industries, Ltd. (Sumitomo Metals), together with Sumitomo Corporation, has received an order for steam generator tubes(*1) ("SG tubes") to be used in the AP1000(*2), an advanced nuclear reactor developed by Westinghouse Electric Corporation of the U.S.A., at Sanmen Unit 1 and Haiyang Unit 1 in China. This is the world's first order for SG tubes to be used in the AP1000. Sumitomo Metals has also received a preliminary order for SG tubes to be used in the AP 1000 in the U.S.A., namely, Vogtle Nuclear Power Plant Units 3 and 4. These SG tubes will be supplied to DOOSAN Heavy Industries & Construction in South Korea for assembly into steam generators.

Triggered by worldwide growth in electricity demand and the need to prevent climate change (with a purpose of reducing carbon dioxide emissions), there has been a surge in the construction of nuclear power plants. In this environment, demand for SG tubes is expected to exceed the production capacity of the only three suppliers in the world, namely, Sumitomo Metals, Sandvik AB (Sweden), and Valinox Nucleaire (France).
Bending radians at SG tubes are becoming larger, along with the trend that the advanced nuclear reactors are larger in size, in order to improve economic competitiveness and safety.
In response to this situation, Sumitomo Metals decided to invest in the remodeling of production equipment for SG tubes and the expansion of its production capacity at the Pipe & Tube Company's Steel Tube Works in Amagasaki, Hyogo Prefecture. This investment was recently initiated, and Sumitomo Metals' production capacity of SG tubes will be raised by approximately 30%.

1. Order Details (China and the U.S.A.)
(1) Product: SG tubes for AP1000
(2) Quantity: Approximately 750 tons
(3) Amount: Over 10 billion yen
(4) Delivery: Fiscal year 2009 for two AP1000 reactors in China
Fiscal years 2010 and 2011 for two AP1000 reactors in the U.S.A.

2. Outline of Investments
(1) Amount: 2.3 billion yen
(2) Major areas of capacity expansion:
Remodeling of a straight tube manufacturing line and a bending line, and increase in capacity for packaging and warehousing
(3) Start of increased production: October 2008

[Terms]
*1. SG tubes
Tubes used in pressurized-water reactor (PWR) nuclear power plants. The tubes are used for heat exchange which is a process of generating steam when hot water heated by heat generated by the nuclear reactor is conducted from the first cooling water zone to the second cooling water zone. They are made of high-priced materials with a nickel content of 60%.

*2. AP1000
The AP1000 is an advanced nuclear reactor developed by Westinghouse Electric Corporation with further improvements in safety and economic competitiveness, compared to conventional pressurized-water light-water reactor plants.