The JV starts the operations 1-2 months ahead of original schedule to ship for local automakers pumping up operations to full capacity in 2006.

The JV is to serve growing automobile production in China. The JV has continuous descaling and cold-rolling mill with 1.76 million tonnes of annual capacity, continuous annealing and processing line with 950,000 tonnes of capacity, no.1 CGL with 450,000 tonnes of capacity and no.2 CGL with 350,000 tonnes of capacity. The JV will ship galvanizing steel for automobile from no.1 CGL and for appliances and construction industries from no.2 CGL.

The JV started test operation of CDCM in late November and is working to set other facilities. The JV will start continuous commercial operation of CDCM and CAPL by March 2005 to ship cold rolled sheet. The JV will ship galvanizing steel in April. The JV tries to get qualifications from automakers through sample shipment.

Chinese automobile production is around 5 million units, representing third production country after US and Japan. Chinese automobile output is expected to increase to 9-10 million units by 2010. Chinese automotive steel supply is expected to be short for growing demand though the JV, Anshan Steel and Guangzhou JFE Steel Sheet are to ship automotive grade sheet.

The JV with 3 billion yuan of capital is owned 50% by Baosteel, 38% by Nippon Steel and 12% by Arcelor. The parent companies expend 6.5 billion yuan for the project.