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Baosteel to boost production capacity ahead of demand

Baosteel Group subsidiary, Shanghai Baoshan Iron and Steel Group Co, said yesterday it will pump 12 billion yuan (US$1.4 billion) into expanding production to meet increased demand for steel in China's auto, shipbuilding and construction industries.

The company said it was expecting a surge in demand for cold-rolled steel, which is forecast to increase to 20 million tonnes by 2005.

Ten million tonnes of this will be used in the building of China's US$5.8 billion West-East gas pipeline, the country's ambitious project to pipe in gas from Xinjiang to its thriving eastern cities.

A new plant will be built costing some 6 billion yuan, which will also help meet the needs of the booming auto industry.

Car manufactures like General Motors and Volkswagen are in the midst of dramatically increasing production in the world's fastest growing auto market. Japanese giants Toyota and Honda have also announced plans to expand operations in China.

Production at the new plant will start in March 2005 with annual capacity of 1.9 million tonnes. The other 6 billion yuan will be spent on construction of a heavy-plate rolling production line, to supply shipbuildersand oil pipeline building projects.
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