The Economic and Information Commission of the city of Chongqing in China has announced that Shanghai-based Chinese steelmaker Baoshan Iron and Steel Co. Ltd (Baosteel) has signed a contract to establish an automotive steel sheet processing facility in Banan industrial park in Chongqing with an annual output capacity of 80,000 mt, as reported by Chongqing Economic Times on January 10. The hot rolled steel sheet feedstock for the facility will be transported from Shanghai to Banan park.
Construction work on the project will start in June 2013 and production will commence in the first half of next year, while the total investment will amount to RMB 100 million ($16 million). The annual production value is expected to be RMB 700 million ($112 million).
Baosteel is not the only Chinese steelmaker to be show an interest in the automotive sector in Chongqing. According to the commission, Hubei Province-based Wuhan Iron and Steel Group (WISCO) has signed a strategic partnership agreement with Chongqing-based Chongqing Chang'an Automobile Co., a subsidiary of China Chang'an Automobile Group.
Moreover, Sichuan Province-based steelmaker Panzhihua Iron and Steel Group (Pangang Group) has decided to invest RMB 146 million ($23.4 million) to build the second phase of a steel processing and delivery center in Chongqing, with the annual output of high-grade automobile steel sheet of the second phase amounting to 200,000 mt.
According to the Economic and Information Commission of Chongqing, motor vehicle production capacity in Chongqing will reach 4 million units in 2015, with the related steel consumption rising to around 3 million mt. The share of locally processed steel used in the automotive production in the city will increase from eight percent to 50 percent by 2015, saving RMB 150 million ($24 million) in annual delivery costs based on cost savings of RMB 100 ($15.9)/mt as compared to non-local supplies.