THE WORLD’S largest steel firm, ArcelorMittal, yesterday launched its joint Chinese venture to produce steel for use in car manufacturing.
The group has opened a plant in Loudi, Western China, in combination with Hunan Valin Steel. ArcelorMittal says that the enterprise will be able to assemble 1.5m tonnes of steel per year.
Though China is a major producer of the metal, and exports a large amount of lower-quality steel, the high-quality variety needed for auto manufacturers is still in short supply, requiring imports currently.
“Demand for autos in China will continue to grow. Today, China produces about 20m cars per year ... so there is demand for these kind of niche products, like the ultra light-weight auto steel,” said chief executive Lakshmi Mittal, speaking to Reuters.
ArcelorMittal said that car sales in China rose by 16 per cent during 2013, up to 18m units.
The firm added that more than a third of the sector’s global growth in the next six years is expected to come from the country, despite projection that the country’s GDP growth will keep slowing.