Metal Products News
- Nippon Steel may raise auto steel output
Date: 6-Mar-2007 Sources: (Shenzhen Daily)
NIPPON Steel Corp., the world's second-largest steelmaker, may increase output at its joint venture in China with Baosteel Group Corp. and Arcelor Mittal to meet demand from the country's automakers.
'We are considering steps to meet rising demand,'' Hayato Uchida, a spokesman for the Tokyo-based company, said yesterday after the Nikkei English News reported it may double production.
'I haven't heard of any plans to double the output,'said Chen Ying, chief financial officer of Baoshan Iron & Steel Co., Baosteel's Shanghai-listed unit.
China's economy has grown by an average 9 percent a year in the past decade, making car ownership affordable for more people. Automakers including General Motors Corp. and Volkswagen AG sold 25 percent more vehicles in China last year as sales in the country surpassed those in Japan for the first time.
Doubling output at the Baosteel-NSC/Arcelor Automotive Steel Sheet Co.'s plant in Shanghai to 1.6 million tons will cost as much as 50 billion yen (US$425 million), the Nikkei English News reported, without citing anyone. The three companies are expected to meet at the end of March, the paper said.
'We have not decided on anything in detail,'' Nippon Steel's Uchida said.
The joint venture, which began operations in late 2005, initially produced about 800,000 tons a year of galvanized steel sheets mostly for automobiles, according to Nippon Steel.
The plant has capacity to produce 1 million tons of galvanized steel, according to Baosteel.
Baosteel, China's largest steelmaker, has a 50 percent stake in the venture, with Nippon Steel holding 38 percent. Arcelor Mittal, the world's top steel producer, holds 12 percent.
China's vehicle sales will likely rise 18 percent this year as economic growth boosts demand in the world's second-biggest automobile market, the China Association of Automobile Manufacturers said Jan. 22.
Any expansion by Nippon Steel means the company will join JFE Steel Corp., Japan's second-biggest steelmaker, in increasing its presence in China. The unit of JFE Holdings Inc. and Guangzhou Iron and Steel Enterprise Holdings Ltd. will officially open a plant to produce automotive steel sheets in Guangdong.
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