China Steel Corp (中鋼), the nation’s biggest steelmaker, yesterday signed an agreement with Anhui Jianghuai Automobile Co (江淮汽車) to supply cold-rolled coils to the Chinese automaker.
The Kaohsiung-based steelmaker said in an e-mailed statement that beginning in July it would supply 2,000 tonnes of cold-rolled sheets and coils per month to Jianghuai Automobile.
“[We] hope to raise the shipments to above 20,000 tonnes per year next year, making it a new export outlet for China Steel’s No. 3 cold-rolled steel plant,” the company said in the statement.
MAJOR GROWTH
The deal with Jianghuai Automobile is expected to contribute more than NT$500 million (US$17.29 million) to China Steel each year, the company said.
The company’s No. 3 cold-rolled steel plant is designed for an annual capacity of 1.5 million tonnes, including 1.1 million tonnes of cold-rolled coils and 400,000 tonnes of hot-dipped zinc-galvanized sheets. China Steel said the plant had completed a test run and would start production in June, with products mainly to be used in the automobile sector.
The company’s latest deal with Jianghuai Automobile represents its continued efforts to increase steel exports for higher margin. It has shipped 200,000 tonnes of cold-rolled products and hot-dipped zinc-galvanized sheets per year to China, Southeast Asia, Europe, India and Mexico via subsidiary China Steel Global Trading Corp (中貿國際).
Currently, China Steel sells about 75 percent of its steel products to domestic customers and ships the remainder abroad. Shipments to Japan and China account for about 30 percent each of the company’s exports, while about 27 percent goes to Southeast Asia, company data showed.
PAVING THE WAY
Yesterday’s deal was signed by China Steel chairman Tsou Juo-chi (鄒若齊) and Jianghuai Automobile chairman Zuo Yanan (左延安) in Kaohsiung. The Taiwanese firm said in the statement that it hoped the deal would pave the way for future supply of its hot-rolled steel products to the Chinese automaker.
Jianghuai Automobile develops, builds and markets commercial and passenger vehicles in China, with a capacity of 610,000 units per year. The Chinese automaker also produces engines and other core auto components.
Shares of China Steel rose 0.57 percent to NT$35.1 yesterday. The stock has increased 4.78 percent so far this year, versus a 0.17 percent decline on the benchmark TAIEX.
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