Guangzhou Steel and JFE to build CR project

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.