Shougang Co., Ltd. announced a few days ago that based on the investigation of market demand and the matching of existing production lines, the company’s holding subsidiary, Shougang Jingtang Iron & Steel Co., Ltd. (“Jingtang”) decided to build a dedicated galvanized high-strength automotive panel. The production line, with a total investment of 1.304 billion yuan, is scheduled to be put into operation before December 2019. It will have a production load of 80% within one year of production and a designed annual production capacity of 360,000 tons in the second year.
According to the announcement, Jingtang’s construction of a galvanized high-strength automotive plate special production line and supporting inspection units is designed to produce an annual output of 360,000 tons of finished products, including 320,000 tons of cold-base galvanized products and 40,000 tons of hot-base galvanized products. By optimizing and upgrading the existing production capacity, the product structure can be further optimized, and the company's auto board supply capacity can be improved as a whole. The project was built in the reserved area of the Jingtang company factory area. The project includes galvanized high-strength automotive plate special units, re-rolling inspection and semi-automatic packaging units to meet the needs of high-end automotive plate production.
The company has a leading position in domestic tinplate, home appliance and electrical steel and other market segments. Through continuous adjustment of product structure, its leading products have made great progress during the reporting period. The company stated that this investment aims to improve the auto sheet supply capacity of Jingtang Company, optimize the product structure, integrate with the existing galvanized production lines, conduct specialized production and improve the division of production lines, and improve the technology and product advantages of Jingtang Company. Enhance the overall competitiveness of Shougang's automotive panels. This project can improve the company's supply capacity and has the ability to obtain more car board supply shares, which is beneficial to the company's profits.
Everbright Securities Research reported that Jingtang Steel had achieved a net profit of 1.83 billion yuan in 2017, a substantial increase of 320% year-on-year. The Jingtang Phase II project plans to produce 5.1 million tons of steel, which accounts for 32% of the company's current steel output. It will reduce the replacement volume by reducing other backward production capacity in Tangshan City. It is expected to be completed by the end of 2018, and will be gradually put into operation from 2019 to 2020, providing long-term future Profitability flexibility.
In recent years, with the further improvement of the national energy conservation and emission standards and the C-NCAP collision standard of the China Automotive Technology and Research Center, the proportion of ultra-high strength steel has increased year by year with the development of new models. According to the prediction of the strategic alliance of automotive lightweight technology innovation, In 2020, the use of ultra high strength steel will reach 1.5 million tons, of which the proportion of galvanized products will gradually increase.
