Guangzhou JFE Steel Sheet to Start Auto Grade Production

JFE Steel’s galvanizing joint venture, Guangzhou JFE Steel Sheet will start commercial production of automotive steel. The firm is in final stage of material approval from transplants of Toyota, Nissan and Honda in Guangzhou starting the shipment as early as in the year. With automotive application, the firm, which produces now materials for construction and appliances, is pumping up the operation to full capacity of annual 400,000 tonnes in spring of 2007. The firm operates at around 200,000 tonnes per year after the firm started operation in March. The firm, which already ships some automotive steel for Southeast Asia, will start commercial operation of automotive steel after the firm gets approval from the main target of local transplants of Japanese automakers. The firm planned to produce 200,000 tonnes for the first year and 400,000 tonnes for the second year. The firm tries to pump up the operation to meet the demand for local procurement by Japanese transplants in Guangzhou. Chinese automobile output increased by 24% to 4.92 million units in January-August from same period of 2005. The output is expected to exceed 6 million units in 2006 and to reach 10 million units in 2010. The high valued automotive grade galvanizing steel production bases are limited to several lines including joint venture of Nippon Steel and Baoshan Iron & Steel and joint venture of ThyssenKrupp and Anshan Iron & Steel along with Guangzhou JFE Steel. When the automotive steel supply is expected to be short, ThyssenKrupp will build second line with annual 400,000 tonnes of capacity.