China's automotive industry is pretty attractive for steelmakers

China’s automotive industry is pretty attractive for steelmakers

The bright development prospects of China's automotive industry attract the world's leading iron and steel producers to invest in China. In recent days, a new plant called Shanghai Baosteel and Arcelor Tailor Metal Co. Ltd. was launched in Jiading of east Shanghai with three production lines. The Shanghai Baosteel-Arcelor Tailor Co. Ltd. is jointly financed by three investors. These are; two subsidiaries of the Baoshan Iron and Steel Group, which holds 38% stake in the joint venture, Arcelor, which controls 25%, as well as a subsidiary of the Shanghai Volkswagen Corp., which holds the remaining 37% stake. The joint venture has an annual production capacity of 2.6 million parts or 40'000 tons of tailor welded blanks and will provide key Chinese automobile manufacturers tailor metals products for higher safety. The annual production capacity of the plant is reportedly to increase to 10 million parts. Chinese steelmakers are choosing European and Asian companies as partners in order to adopt themselves well to development of China's automotive industry. Industry experts state that China's demand for steel in complete automobile manufacturing will rise from 7 million tons last year to 8 million tons by 2005. The demand will climb to 11 million tons by 2010.