China’s Tsingshan Holding Group started the construction of the cold-rolling line at what will be one one of the largest stainless steel projects in India when completed, it said late last month.

Tsingshan has formed a joint-venture company - Cromo Steels Private Ltd Co (CSPL) - with unknown parties to construct a 150-billion-rupee ($2.3-billion) integrated plant, which would consist of hot-rolling and cold-rolling lines as well as smelting facilities, in Gujarat state.

It will reportedly have crude stainless steel capacity of 2 million tonnes per year while the CRC line will have capacity of 600,000 tpy, an industry analyst in China said.

Construction of the entire project should be completed within five or six years, Tsingshan said.

The plant will sell mainly 304-series hot-rolled flat products as well as cold-rolled products to the growing markets of East and Southeast Asia, which are also the main markets for Tsingshan’s Indonesian steel operations, market observers suggested.

Tsingshan started operations at its Morowali stainless steel plant in Indonesia in June 2016 - it said at the time that it was targeting the Southeast Asian market.

China imported 185,000 tonnes of stainless steel slab during January-October 2017, up from just 15,000 tonnes a year earlier, according to the China Stainless Steel Council (CSSC). It did not break down the figures on a country-by-country basis.

Taiwan imported 22,722 tonnes of hot-rolled stainless steel from Indonesia in November 2017, the CSSC also said.

As well, Tsingshan has high hopes for the project given expectations that India’s rapid economic growth will bolster its stainless steel industry, chairman Xiang Guangda said at the ground-breaking ceremony.

“India is also one of major markets for the plant,” an analyst at an industry information provider in China said.

Metal Bulletin assessed the price of 304 stainless hot-rolled sheet at $2,180-2,230 per tonne cif East Asian ports on Wednesday January 31.

The price has generally traded higher since bottoming out at $1,610-1,630 per tonne in June last year - it peaked at $2,270-2,300 per tonne in September, the highest since early January 2015.

Higher nickel prices, suspensions and closures of Chinese operations on environmental grounds and robust demand from Asia, Europe and North America have been the drivers of the market over the past five months.