Chinese Competition
The Chinese steel market is becoming a fierce battleground, as global steelmakers are trying to dominate the high-value-added steel sheet market in partnership with local manufacturers so as to meet the fast-growing demand for automobile steel sheets and those of home appliances products.
According to industry sources, global crude steel production volume increased 3.5 percent year-on-year to amount to 1.6072 billion tons last year. China accounted for 48 percent of it, followed by Japan, the United States, India, Russia, Korea, Germany, Turkey, Brazil, and the Ukraine.
China’s crude steel production volume has continued to increase from year to year. It rose from 724 million tons to 779 million tons between 2012 and 2013, and is expected to exceed 900 million tons this year. This is contrary to Japan’s slow growth from 107.2 million tons to 110.6 million tons and Korea’s 4.5 percent decline during the same period.
Under the circumstances, global steelmakers are setting up joint ventures and integrated steel mills one after another in China. Their target customers include global automakers that procure iron ore and steel from China. For example, JFE is currently manufacturing 800,000 tons of automobile steel sheets a year with Guangzhou Steel, while Nippon Steel & Sumitomo Metal, Baosteel, and ArcelorMittal are planning to increase their capacity from 1.3 million tons to 2.7 million tons by 2015. ThyssenKrupp is moving to hold hands with Anshan Iron & Steel Group Corporation to produce galvanized steel sheets and alloy sheets.
POSCO, in the meantime, signed an MOU with Chongqing Iron & Steel in July this year. It also built an automobile steel sheet manufacturing plant in Guangdong last year and has sold its products to Toyota, Honda, Nissan, GM, Volkswagen, and Chinese carmakers.