JFE Steel to Launch 2nd Phase of Guangzhou JFE Steel Sheet in 2011

JFE Steel’s Chinese automotive flat steel making plant, Guangzhou JFE Steel Sheet (GJSS) targets commercial operation for US$ 820 million second phase including pickling line and tandem cold mill (PL-TCM) with annual 1.8 million tonnes of output capacity, continuous annealing line (CAL) with 1 million tonnes capacity and no.2 continuous galvanizing line (CGL) with 400,000 tonnes capacity in 2011. The firm expects existing no.1 CGL will reach annual 400,000 tonnes of full capacity operation in 2010. The firm tries to follow growing automotive flat steel demand in China.

The second phase construction is completed for the groundwork and in steel structural building for some of the lines including cold rolling mill. The firm starts to set major equipments from March 2010. Mitsubishi-Hitachi Metals Machinery designed the major equipments. The lines for second phase have all maximum 1,850 millimeters width for cold rolling mill, CAL and CGL while the no.1 CGL’s width is 1,700 mm. The firm eyes to add a rolling stand for cold rolling mill with 4 stands 6 high.

The no.2 CGL will make galvannealed sheet mainly. The line can make JFE Advanced Zinc (JAZ), which is galvannealed steel sheet with high lubrication property, in future.

The no.1 CGL increased the production since the start in April 2006 and operated at 70% of capacity utilization in third quarter of 2008, which allows the profitability. After the Lehman Shock, the firm increased the production from the bottom in February 2009 to around 30,000 tonnes level in September, which is as high as 80% operation. The sales for local 5 automotive transplants of Toyota Motor, Honda Motor and Nissan Motor represent more than 90% of the total shipment.

Chinese automobile production increased by 26% to 8.25 million units in January-August from same period of 2008. The production increased by 79% to 1.36 million units in September and is expected to reach 12 million units in 2009. The production could reach 15-16 million units in 2010.

GJSS targets full capacity operation and profitable year for 2010 by utilizing the advantage of the nearest supplier for Guangzhou transplants of Toyota, Nissan and Honda. The firm then utilizes the advantage of wide high tensile cold rolled flat and galvannealed steel supply ability with the second phase commissioning.