JFE Steel announced on Wednesday the flat steel making joint venture, Guangzhou JFE Steel Sheet (GJSS) started No.2 hot-dip galvanizing line with annual 400,000 tonnes of output capacity. GJSS doubled the galvanizing capacity to 800,000 tonnes when the main users of transplants of Japanese automakers keep full capacity operation under strong Chinese industry. JFE Steel and the partner of Guangzhou Iron and Steel Enterprises Holdings try to improve the supply ability of high grade flat steel when transplants of Japanese and European automakers expand the capacity and local procurement.
JFE Steel and the partner operate the 50/50 joint venture launched the No.1 galvanizing line in 2006. GJSS invested around US$ 820 million for expansion. The firm already started commercial operation of cold rolling mill with annual 1.8 million tonnes of output capacity in July 2011 and started continuous annealing line with 1 million tonnes of output capacity in August 2011. The firm completed the expansion through the start of No.2 galvanizing line. GJSS ships around 90% of the production to automobile industry while the firm serves appliances and construction market. The firm tries to expand the supply to meet growing demand for the applications. World largest automobile making country of China increased the output by 0.9% to 18.42 million units in 2011 from 2010. The production is expected to be around 19 million tonnes in 2012 due to slower sales growth of commercial vehicle and domestic vehicle under financial squeeze while the sales are still strong for high grade model made by transplants of Japanese, European and US automakers. Automobile flat steel joint venture of Nippon Steel and Baosteel group also keeps full capacity operation. Japanese automobile production is expected to be around 9.3 million units in 2012 when the makers try to recover the production loss in 2011 due to the major earthquake and Thai flood. The makers increase the production in Mexico and offshore plants. JFE Steel tries to serve the growing demand through the expanded offshore production bases including Thai galvanizing line, which will start operation in April 2013.