Nippon Steel to Join Suspension Spring Wire JV in Shanghai

Nippon Steel is concluding the talk to join Shanghai Neturen, which is cold steel wire making joint venture of Neturen, Metal One Corporation and Shanghai Automotive Industry Corporation to supply materials for suspension spring. Shanghai Neturen will increase the capital by US$ 500 and expand the capacity to around 170,000 tonnes per year in July. Nippon Steel, which provides the wire rod for the JV, is expected to invest US$ 550,000 in the JV. Nippon Steel tries to improve the supply ability including delivery and quality for growing Chinese market through the participation while Nippon Steel improves the wire rod supply capacity with partnership with Sanyo Special Steel. Neturen, Metal One and Shanghai Automotive Industry established Shanghai Neturen in July 2003. The JV with more than 80,000 tonnes per year of annual output capacity ships steel wire for suspension spring. The JV will expand the output capacity to meet growing local demand from transplant of Japanese spring makers when Japanese automakers increase local output. Nippon Steel will have 5% share in the JV with 40% share by Neturen, 40% by Shanghai Automobile Industry and 15% by Metal One after the capital increase to US$ 11 million. Neturen purchases wire rod for Japanese operation and for Shanghai Neturen from Nippon Steel. Japanese automotive transplants in China use Japanese high-grade special steel wire rod at 100% of the requirement due to the higher quality standard. Japanese parts makers expand the presence in China when Toyota Motor’s parts suppliers build plants one after another to meet Toyota Motor’s needs for third plant in Tianjin. Kobe Steel also decided to build wire drawing makers in southern and eastern China when Japanese automakers and parts makers increase local procurement for spring wire and bolt and nut wire.