Guangzhou JFE Steel Sheet to Post First Profit with Higher Output in 2010

JFE Steel’s Chinese automotive flat steel production plant, Guangzhou JFE Steel Sheet expects to post first profit in 2010 when the continuous galvanizing line (CGL) production level reached almost full capacity at more than 30,000 tonnes in May. The firm continues the US$ 820 expansion to add pickling line-tandem cold mill (PL-TCM), continuous annealing line (CAL) and second CGL on schedule. The firm completes the annual 1.8 million tonnes of production capacity to serve growing Chinese automobile flat steel demand.

The No.1 CGL started operation in April 2006. The production increased gradually and reached around 70% in third quarter of 2008 and the firm expected to post first yearly profit for the year. The firm reduced the operation level after Lehman shock but the production recovered from the bottom in February 2009 and the production increased to 80% level in late 2009.

The firm increased the operation rate to full capacity level in May 2010 with higher sales to transplants of Honda Motor, Toyota Motor and Nissan Motor. Guangzhou JFE Steel Sheet posted monthly profit in late 2009 and keeps profitable operation. The firm tries to post first yearly profit in 2010 by improving the efficiency while the operation rate decreases slightly under adjustment in Chinese market.

The firm adds PL-TCM with 1.8 million tonnes of annual output capacity, CAL with 1 million tonnes of capacity and No.2 CGL with 400,000 tonnes of capacity provided by Mitsubishi-Hitachi Metals Machinery. The second phase expansion enables to make wider products with maximum 1,850 millimeters width compared with max 1,700 mm for No.1 CGL. The PL-TCM with 4 stands with 6 high rolls has potential to add a stand in future. The CAL is to make high tensile automotive cold rolled flat steel. The No.2 CGL is specialized to make galvannealed steel sheet.