Metal Products News
- Baosteel eyes auto steel expansion
Date: 14-Mar-2007 Sources: (Shenzhen Daily)
BAOSTEEL Group, China's largest steelmaker, is considering expanding its automotive steel capacity to meet growing demand from China's car industry, its group president said yesterday.
Baosteel produced 2.6 million tons of automotive steel in 2006, or about half of China's consumption, Ai Baojun said, compared with the company's total steel output of 22.53 million tons in the year.
Crude steel output in 2007 will be about the same as 2006, Ai said. Baosteel's 2006 output dipped by 200,000 tons compared with 2005 production of 22.73 million tons, in line with earlier company statements that repairs at a blast furnace would cut output.
'We're still debating the best way to expand, whether through our joint venture or on our own,'Ai told reporters, adding that the company had not yet decided how much to expand its automotive steel output.
'We have a responsibility to meet the industry's demand.
Baosteel owns 50 percent of an automobile joint venture in Shanghai in which Nippon Steel Corp. of Japan holds 38 percent and Mittal Arcelor owns 12 percent.
The joint venture produced 1.8 million tons of automotive steel last year. Baosteel produced 800,000 tons from its wholly-owned automotive steel plant.
Car sales in China rose 30 percent in 2006 to 5.18 million, exceeding a 25 percent rise in total vehicle sales to 7.22 million.
Baosteel has made a series of public overtures to Nippon to expand cooperation ever since Mittal, the world's largest steelmaker, succeeded in its bid to buy Arcelor, the second largest.
During a visit to Japan in November, Baosteel's then-chairwoman, Xie Qihua, proposed that Nippon buy a strategic stake in Baosteel if it lists overseas. Nippon executives have also spoken about expanding the firms' automotive steel venture.
'We have good cooperations with domestic and overseas companies, including Nippon, Posco and Arcelor,'Ai said.
'Naturally in the future there will be some changes in our cooperations, but that's a normal part of the cooperative process.
Baosteel is still waiting for approval for a greenfield steel plant in Zhanjiang, Guangdong Province, Ai said.
He did not comment on possible future domestic acquisitions. Baosteel is leading China's drive to consolidate its steel industry and create globally competitive giants.
He said the company did not have a concrete plan for overseas listing.
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