Chinese steel giant Baosteel plans to double production

4 April 2007

Beijing, China, 4 April – Steelmaking group Baosteel, China’s largest Baosteel producer and the country’s single biggest Brazilian iron ore customer, has announced plans to double its current production by 2012, the Chinese official press reported Tuesday.

According to the plan announced by Baosteel, the company wants to produce 50 million tons of steel per year by 2012.

In 2007 the group plans to increase steel production to 23.27 million tons against 21.74 million in 2006 and estimates that its annual production capacity will reach 30 million tons by 2010, thus making it one of the three largest steel producers in the world.

The company’s growth plans could mean a greater volume of purchases of iron ore from Brazil.

The raw material is, after soy, the largest Brazilian export to China, via Companhia do Vale do Rio Doce (CVRD), the world’s biggest producer of the product.

In the first nine months of 2006, CVRD sold 20.438 million tons of iron ore and pellets to China, or 28.1 percent of the company’s total sales in the period.

In 2005 China was the company’s main customer, as it imported 56.5 million tons of iron ore, or 22.4 percent of the Brazilian company’s total sales.

Last year, CVRD posted turnover of US$20.23 billion, a rise of 24.6 percent against 2005 and net profit rose 2.7 percent to US$1.68 billion in 2006. (macauhub)