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The proposed facility, which is owned by Zhejiang Yongjin and Tsingshan’s Fujian-based subsidiary Tsingtuo Group, will be based in Fujian province in the south-east of the country and is expected to focus on 200,300 and 400-series stainless flat products, according to local media.
Stainless producer Yongjin’s low offers for its products already dragged down the country’s stainless market in the fourth quarter of 2013.
The cooperation with Tsingshan will increase Yongjin’s competitive edge in the stainless market, a Wuxi-based analyst said.
“Tsingshan’s hot rolling production cost is lower because of its processing technology, while Yongjin’s cold rolling costs are also low,” he said.
Yongjin currently runs two mills in eastern China’s Jiangsu province – a 100,000-tpy stainless cold rolling facility with BA surface, which was put into operation in September 2012, and a 250,000-tpy plant with 2B surface, which started production in August 2013.
The project has a designed annual capacity of 1.5 million tonnes, with construction divided into three phases. The first 500,000-tpy phase will be completed at a cost of 2 billion yuan ($326.3 million), which is expected to put into operation in October 2015.
Total investment for the project is 4 billion yuan ($652.6 million).
Tsingshan started trial production at a 3-million tpy 1780mm hot rolling mill last Friday, also in Fujian province.
China’s stainless steel market could come under further pressure after a project for a 1.5 million-tpy stainless cold rolling mill was launched at the end of last week by two major privately-owned producers.