SteelOrbis Shanghai
Guangzhou Iron & Steel Group has just inked an agreement with
Japan's JFE Steel Corporation on the
construction of a 1.8 million mt CR coil
production line and a second 400,000 mt hot-dip
galvanized coil line, according to a
China Business News report.
This latest agreement paves the way for the second phase of
construction in the Guangzhou JFE Steel Sheet Co. LTD joint venture (GJSS) established in 2003 by the two companies. Upon completion of this phase at the end of 2009, GJSS will have an annual capacity of 800,000 mt hot-dip
galvanized coils and 1.8 million mt CR coils. Of the 1.8 million mt CR coils, one million mt will be supplied to electrical appliance producers and auto producers in Zhujiang Delta, while the remaining 800,000 mt will be used in the manufacture of hot-dip
galvanized coils.
An insider in GJSS explained that their CR coils are mainly imported from
Japan at the current time, but that when this project commences
production operations, these costs will be reduced by a large margin.
On September 22, 2003, Guangzhou Steel and JFE had made an initial combined investment of $168 million to set up the GJSS joint venture. The first phase of the project involved the
construction of a hot-dip
galvanized coil
production line with an annual
production of 400,000 mt. This
production line started operating on January 17, 2006. 80 percent of its products are supplied to auto producers in Zhujiang Delta and
Southeast Asia, such as Isuzu Motors and Mitsubishi. The remaining 20 percent are supplied to electrical appliance producers in Zhujiang Delta.