Kobe Steel to Expand Global Auto-High Tensile Flat Steel Supply

Kobe Steel tries to expand global supply network of automotive high tensile steel. The firm started study for potential joint venture with Essar Steel of India to make automotive flat steel in India and conducts full scale feasibility study. Kobe Steel could finalize discussion with US Steel of USA as early as in the year to make cold rolled high tensile steel at the joint venture, PRO-TEC Coating in USA. Kobe Steel also expands joint work with voestalpine of Austria to expand the supply in Europe. Kobe Steel eyes potential production in China to follow growing demand for high grade automotive flat steel in the world.

Kobe Steel signed technical support agreement with Essar Steel for automotive outer panel in March after the cooperation agreement in November 2008. They are in study for potential joint venture to make automotive cold rolled high tensile steel and galvanizing steel. They will start feasibility study including production plan by Japanese transplants in India for the final decision.

Kobe Steel was expected to reach agreement with US Steel for cold rolled high tensile steel making project in late 2008 but the decision was postponed due to Lehman shock. The project could be decided in the year when US automakers plan model changes around 2014. PRO-TEC Coating, which has 2 continuous galvanizing lines with total 1 million tonnes of annual output capacity, now provides high grade flat steel to major automakers including General Motors and Toyota Motors’ transplants.

China is the strategic automotive high tensile steel market for Kobe Steel as North America and India. The firm studies potential production site for the products in China.

Kobe Steel launched KOBELCO VISION “G” as the long term strategy earlier the year. The firm tries to expand global activity for sustainable growth. The steel unit tries to expand export of only one products including high tensile flat steel, special steel wire and bar and electrogalvanizing steel while the unit tries to expand the offshore production.

Kobe Steel has competitiveness in cold rolled high tensile steel with 100 kilogram per mm2 or more tensile strength, which is made at continuous annealing line with world fastest water quench zone at Kakogawa works. The firm also eyes expansion of CAL capacity from current annual 500,000 tonnes at Kakogawa when the high tensile steel demand will increase to improve fuel economy and crash safety. The firm could have annual 2 million tonnes of cold rolled high tensile steel capacity in Japan, USA, India and China in future.