BNA Plans Higher Automotive Flat Steel Supply in 2011

Baosteel-NSC/Arcelor Automotive Steel Sheets (BNA), which is Shanghai based joint venture of Nippon Steel, Baosteel Group and ArcelorMittal, will normalize automotive flat steel production. The joint venture plans to increase the production in 2011 more than 2010 level after the production decreased in April and May when the users of transplants of Japanese automakers plant to increase the output in second half of the year more than before the major earthquake in Japan while the transplants reduced the production.

BNA kept full capacity operation at near 200,000 tonnes per month through March but the firm reduced the production since April. The demand started to recover recently when some of Japanese transplants accelerate the production recovery 2-3 months ahead of former schedule.

Japanese automakers’ transplants in China try to recover production cut in the first half by increasing the production in the second half. Chinese automobile production was expected to exceed 20 million units in 2011 as of the beginning of the year compared with 18.26 million units in 2010. The production could be near the estimation with higher production in the second half despite of the temporarily production cut due to the quake and finish of subsidy by the government.

BNA’s vice president Seiji Hosokai said the firm will normalize the production depending on the demand condition. The production schedule is still tight for the cold rolling mill, which was expanded to 2.2 million tonnes of annual output capacity through better operation. BNA tries to secure the supply volume with supply support by Baosteel’s facility and Nippon Steel along with BNA’s production increase effort.

BNA started the commercial operation in 2005. The shipment to appliances represented around 70% for the beginning stage but the shipment to automobile was near 70% in 2007 when the production reached 1.72 million tonnes. The production surged for automotive grade products including galvannealed steel since February 2010 when the firm launched No.3 continuous galvanizing line and the demand recovered from impact of Lehman shock.

Baosteel and BNA have more than 50% of automotive flat steel share in Chinese market. Chinese automakers plan to expand the output capacity. The automakers including other than Japanese transplants will increase use of high grade flat steel including galvannealed steel and high tensile steel for lighter weight target. BNA tries to meet the growing demand for the high grade steel products as one of the top quality flat steel suppliers in China. BNA tries to increase the supply ability and sales volume by utilizing Baosteel’s sales and processing network in China.