Baoshan Iron & Steel announced that it is planning to build two new steel mills at a combined cost of US$2.4bn, to produce steel for the automotive and shipbuilding industries. Baoshan has reached a basic agreement with Japan's largest steel-maker, Nippon Steel, to build a US$1bn mill that would produce an annual 1.7m tonnes of steel for motor manufacture. Its output would be sold
to domestic as well as to foreign-invested car-makers and would also be exported to Japan and Germany. Baoshan will build the second plant, to produce heavy gauge steel for use in ships and boilers, on its own.
Construction of both mills will start in 2003, with production slated for 2005. Baoshan said that steel demand for motor manufacture and shipbuilding was growing by 20 per cent a year and that the new facilities would enable it to meet a demand that was at present being met by imports.
In the same week as Baoshan announced its plans, Chinese media reported that the country's steel imports in the first 10 months of 2002 rose by 46 per cent, to 20.6m tonnes.