JFE-Baosteel JV in China expands HDG capacity to 1.2 mn t/year

JFE Steel, Japan's second largest integrated mill, shared on December 8 that it has completed expanding hot-dipped galvanizing (HDG) capacity at Guangzhou JFE Steel Sheet Co. (GJSS), a 50:50 venture with China Baowu Steel Group, by 50% to 1.2 million tonnes/year via remodeling a 1 million t/y continuous annealing line to anneal and galvanize, and the hot run has commenced sometime in November.

The joint venture in South China's Guangdong province is installed with two 400,000 t/y HDG lines and hosting a 1.8 million t/y cold-rolling capacity, and the expansion in HDG is to meet up the growing demand from China's auto industry with higher production, according to a company official.

The plant will go through the procedure of quality review and certification for the HDG from the new remodeled plant so as to supply auto sheets to Chinese automakers once the commercial production commences sometime in the second half of 2022, according to him, declining to comment on whether Baowu or JFE will supply the hot-rolled coils (HRC) as the feeds.

Steel traders in Tokyo, though, believed that most of HRC feeds will be sourced from Baowu except for those HDGs that are to be supplied to Japan-invested automaking plants in China.

China's auto sheet market is with great potential and has attracted Japanese investments as a result. As of now, not only JFE Steel, but Nippon Steel, Japan's largest integrated mill, also has a 50:50 automotive sheet joint venture with Baowu with the name Baosteel-Nippon Steel Automotive Steel Sheets, Mysteel Global understands.

Located in Shanghai, the Baowu-Nippon joint venture hosts 2.4 million t/y of cold-rolling, 950,000 t/y of continuous annealing, and 1.67 million t/y of HDG capacities with the HRCs mainly from Baowu, according to a company official, though she added that some feedstocks are from Japan upon customers' requests.

Over January-October, China produced 20.4 million units of vehicles, though it was 10.7% lower on year, partly due to the chips shortage, as reported.