Nippon Steel, Baosteel Agree to Build No.3 Galvanizing Line at BNA

Nippon Steel and Baosteel Group announced on Friday they reached basic agreement to build no.3 continuous galvanizing line with 450,000 tonnes of annual output capacity at Baosteel-NSC/Arcelor Automotive Steel Sheets, which is China based 3-way joint venture with Arcelor Mittal. Nippon Steel and Baosteel also start study to launch joint venture for steel dust recycling. They hold regular top meeting and seek further joint activities. They expand the partnership as a part of effort to build alliance network against steel giant, Arcelor Mittal. President Akio Mimura of Nippon Steel and chairman Xu Lejiang of Baosteel held press conference to announce the agreement. BNA build no.3 galvanizing line next of existing line starting operation in 2010. The firm tries to expand the supply to meet demand from growing Chinese automobile industry. BNA’s board will decide the investment after study for detail. Mr. Mimura said galvannealed steel demand in China could increase to near 1 million tonnes in 2010 from estimated 600,000 tonnes in 2007 when Chinese automobile output increases to more than 11.9 million units in 2010 from around 8.5 million units in 2007. He said the firm and Baosteel decided the investment to keep 50% share in automotive steel market in China. They also eye dust recycling plant joint venture as Nippon Steel and POSCO announced the direct reducing iron making plant with the dust in South Korea. Nippon Steel and Baosteel try to utilize the steel source under tight supply of raw materials. They also seek certain cooperation to reduce carbon dioxide. Mr. Mimura said they try to find another project in other than marketing area to benefit them through closer consultation including top meeting.