China 2012 auto steel demand projected at 12 mln tons - Baosteel

BEIJING (XFN-ASIA) - Chinese demand for sheet steel used in auto production is projected at nearly 12 mln tons in 2012, from 7.3 mln in 2007, according to Dai Zhihao, vice president of Baosteel Group Corp.

Baosteel Group, parent of Shanghai-listed Baosteel, expects demand from the auto industry to hit 8.2 mln tons in 2008.

'Baosteel continues to lead the market, and along with Angang Steel, Wuhan Steel, we jointly control 79 pct of the cold-rolled auto sheet market,' Dai said.

Speaking at an industry conference, he said that Baosteel has a 45.4 pct share of China's cold-rolled auto sheet market.

But he added that new market entrants and the upgrading of products from current industry participants is raising competition in China.

'Domestic producers are quickly improving inner panel production, with Angang and Wuhan Steel now able to produce wide sheets,' Dai said.

Meanwhile, Guangzhou JFE is obtaining foreign support in improving its competitiveness, while Maanshan, Bengang and Capital Steel are also entering the market, Dai said.

Foreign groups like South Korea's Posco and Japan's JFE and Nippon Steel have a combined market share of nearly 20 pct in the high-end auto sheet steel market, he added, with imported product still likely to play a significant part because of insufficient local supply.

On the other hand, new entrants are likely to start out with lower-grade product, possibly leading to oversupply in these segments.