Nippon Steel, Tata Steel to Launch Automotive Cold Rolled Steel JV in India

Nippon Steel announced on Thursday the firm agreed with Tata Steel of India to establish joint venture to make cold rolled flat steel for automobile in Tata Steel’s steel works. They build continuous annealing and processing lines (CAPL) with annual 600,000 tonnes of output capacity for 30-35 billion yen to start operation in fiscal 2012. They eye future joint venture for automotive high grade hot-dip galvanizing steel and steel works in India. Nippon Steel makes a step for the global player strategy with 50-60 million tonnes of supply in long term.

Tata Steel controls 51% of the joint venture while Nippon Steel has 49% share in the venture. They build CAPL in Jamshedpur works, Jharkhand. Nippon Steel Engineering will provide the line. The venture will supply high grade automotive cold rolled steel including 35-45 kilogram class of high tensile steel for outer panel for local automakers including Japanese transplants. Nippon Steel will provide technical support to Tata Steel for the high grade steel.

They eye potential hot-dip galvanizing line joint venture to make high grade galvannealed steel along with additional technology tie-up for upper stream operation and integrated steel works joint venture.

Nippon Steel estimates high grade automotive cold rolled steel demand is more than 600,000 tonnes in fiscal 2009 and increases to 1-1.2 million tonnes in 2012-2013 when automotive output increases from around 2 million units to 3 million units. The firm expects Indian automobile industry could use more high grade steel when the automakers would increase export and increase weight of high grade automobile models.