JFE, China BaoWu Steel to form automotive specialty bar steel unit
TOKYO, NNA - Major Japanese steelmaker JFE Steel Corp. will start making high-grade specialty bar steel for Japanese automakers in China after acquiring a 50 percent stake in a unit of top Chinese steelmaker China BaoWu Steel Group Corp.
JFE will inject 690 million yuan ($98 million) into Baosteel Special Steel Shaoguan Co., a specialty bar steel maker under BaoWu, to form a joint venture. The group's subsidiary, Guangdong Shaoguan Iron and Steel Songshan Co., will hold the remaining half, according to a company statement released Tuesday.
The joint venture, based in Shaoguan in the southern province of Guangdong, has an annual output capacity of 1.1 million tons of specialty bar steel.
JFE aims to help Japanese automakers with local procurements of high-grade specialty bar steels used for vehicles, for which steady demand is anticipated in the world's largest automotive market. To date it has relied solely on Japanese exports to meet the needs.
The Tokyo-based company will also seek opportunities to supply the product to Chinese and other foreign automakers as well, a spokesman for JFE told NNA on Tuesday.
JFE and BaoWu have been collaborating on various joint ventures. (NNA/Kyodo)