Friday, October 18, 2013
Kobe Steel To Make High-Tensile Steel In China
TOKYO (Nikkei)--Kobe Steel Ltd. (5406) announced Thursday that it will build a plant in China to make high-performance automotive steel plate as part of a joint venture with China's Anshan Iron and Steel Group Corp.
This is the latest in a series of moves in China by Japan's big three steelmakers to produce high-tensile steel sheet -- a strong but supple material that can withstand great strain without breaking -- in cooperation with major local steel groups.
China's car market is projected to grow from 19 million vehicles in 2012 to 30 million in 2020. Moreover, the amount of high-tensile steel used in each vehicle will sharply increase, from 10-20kg today, "to a level comparable to Japanese cars -- which use about 70kg" as China tightens environmental regulations, says Ikuhiro Yamaguchi, Kobe Steel's executive vice president.
Kobe Steel will have a 49% stake in the venture, which will spend around 29 billion yen to install new heat treatment equipment at Anshan's existing steel mill in Anshan, Liaoning Province. By early 2016, the plant is expected to turn out high-tensile steel plate, with a production capacity of 600,000 tons annually. Anshan will supply cold-rolled steel to the mill as a raw material.
The new plant will primarily supply Toyota Motor Corp. (7203) and other major Japanese automakers but also local firms as well as carmakers from the U.S., Europe and South Korea operating in China. Kobe Steel aims to capture a 30% share of China's cold-rolled high-tensile steel plate market a decade after the mill opens.
Japan's two biggest steelmakers, Nippon Steel & Sumitomo Metal Corp. (5401) and JFE Steel Corp., are already producing high-tensile steel at their Chinese joint ventures, with Baosteel Group and Guangzhou Iron & Steel Enterprises Group, respectively.
(The Nikkei, Oct. 18 morning edition)