Sumitomo Metals Will Increase Production Capacity for Steam Generator Tube to be Used in Nuclear Power Plant

Sumitomo Metal Industries, Ltd. (Sumitomo Metals) decided to expand the production capacity at its Steel Tube Works in Amagasaki, Hyogo Prefecture for steam generator tubes(*1) (SG tubes) to be used in pressurized-water reactor (PWR) nuclear power plants. By this investment, Sumitomo Metals will increase the production capacity of SG tubes by approximately 2.7 times the actual production in fiscal 2008. The investment amount is approximately 14 billion yen, and increased production is scheduled to start in April 2013.

On the back of this investment, triggered by worldwide growth in electric power demand and the need to reduce 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 Nucléaire (France).

Sumitomo Metals has been receiving the bulk of orders for SG tubes to be used in advanced nuclear power plants categorized as the third generation(*2). We also received orders for Vogtle, the nuclear power plant in Burke, Georgia, U.S.A., for the additional construction of two units. This is the first nuclear project to use federal loan guarantees that U.S. President Obama announced this February. We expect to continue receiving orders from the U.S.A., China, South Korea, and other countries for SG tubes to be manufactured in and after 2013, as our production schedule is tight up to 2012.

Outline of Investments
1. Amount : Approximately 14 billion yen
2. Major areas of capacity expansion: Cold working facility, finishing facility, and inspection facility
3. Start of increased production: April 2013

[Terms]
*1. SG tubes: Steam Generator Tube
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 in the nuclear reactor is conducted from the first cooling water zone to the second cooling water zone. Those tubes are used at the critical core part of the PWR plants. They are made of high-priced materials with a nickel content of 60% and a chrome content of 30%.

*2. Advanced nuclear power plant categorized as the third generation
The advanced nuclear power plant that has further improved safety and economic competitiveness, compared to conventional pressurized-water light-water reactor plants.