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China's largest steel maker, Baosteel Group Corp, plans to double automotive sheet production by 2010 to tap growing auto demand.

 

Output is expected to reach 2.6 million tons this year and grow to more than five million tons in 2010, said Ai Baojun, president of Baoshan Iron & Steel Co, Baosteel's Shanghai-listed unit, on Saturday.

 

China has been relying on imports for high-end auto steel while a fast-growing market requires more local supply to domestic and foreign auto companies in the country.

 

Baosteel now has more than 50 percent of the market for cold-rolled auto sheets in China, Ai said at a ceremony in Beijing, which marked the rollout of Baosteel's 15 millionth ton of auto sheet since it started producing it 15 years ago.

 

It also exports sheets to firms including Fiat SpA of Italy, Ford Motor Co's Europe division and General Motors Corp's factories in North America.

 

"Today, almost one of every two vehicles on the streets (in China) uses our steel," Ai said. "It's the growing auto market that drives up demand from Baosteel, while Baosteel's rising production also helps support China's auto industry."

 

China may produce seven million cars and light trucks this year and up to 10 million in 2010, according to Zhang Xiaoyu, chairman of the Society of Automotive Engineers of China.

 

Industry experts said Baosteel should take an even larger stake in the domestic auto steel industry and to produce a wider portfolio of such products if it wants to maintain its current position.

 

To achieve this, Ai said Baosteel will improve competitiveness in logistics, marketing and research and development. The mill will also continue to seek strategic alliances and joint ventures to boost global cooperation.

 

Baoshan steel opened a 1.7-million-ton-a-year auto steel plant with Nippon Steel Corp and Arcelor SA via a 50-38-12 venture last year in Shanghai.

 

(Shanghai Daily November 20, 2006)