Kobe Steel, Ansteel Eye Cold Rolled High Tensile Steel JV in China

Kobe Steel announced on Tuesday the firm signed nonbinding letter of intent with Anshan Iron and Steel Group of China to start study for potential Chinese joint venture to make cold rolled advanced high tensile steel sheet for automobile. They talk the detail including facility, production capacity and location for the venture eyeing continuous annealing line to make high grade steel with 590 mega pascal and higher tensile strength.

Kobe Steel selected Anshan Iron and Steel with technological and production capability as the partner for the Chinese venture. Kobe Steel expects Anshan Iron and Steel provides the material band basically while Kobe Steel could supply part of the material from Japan. They study the production grades depending on the market condition while Kobe Steel expects the products are mainly for 590 MPa and higher strength steel. They expect the conclusion in a year.

Chinese automobile market keeps growing after the market grew to world largest market in 2009. Chinese automobile production capacity could exceed annual 30 million units in 2015 with aggressive expansion by automakers compared with more than 18 million units of production in 2010. Kobe Steel tries to establish local production base to follow the growing demand including from transplants of Japanese automakers.

The potential venture is second cold rolled high tensile steel making plant for Kobe Steel after US joint venture with US Steel and is Kobe Steel’s first Chinese sheet steel making operation. Kobe Steel and US Steel build continuous annealing line with 500,000 short tons of annual output capacity at the joint venture, PRO-TEC Coating to launch the operation in 2013. Kobe Steel provides automobile steel technology to Essar Steel of India and studies potential Indian production base. Kobe Steel has alliance with Voestalpine to supply high grade steel in Europe.