The world's largest multinational steel company, ArcelorMittal, announced on June 27th that it will establish a joint venture with Valin Group and Valin Pipeline (000932) to establish Valin ArcelorMittal Automotive Plate Company, once again launching a strong attack on the Chinese market. Valin Pipeline will own 34% of the shares in the new joint venture, while ArcelorMittal and Valin Group will each own 33% of the shares. The establishment of a new joint venture still requires final approval from relevant departments in China.
In addition, ArcelorMittal will also cooperate with China Eastern Group (00581. HK) in the production of H-beams, providing them with QST technology for H-beams, and hoping to introduce more advanced technologies in the fields of long materials and building materials into China Eastern Group.
Joining hands with Hualing to seek a win-win situation
ArcelorMittal has revealed that the new plant will be located next to Lianyuan Iron and Steel Company, a subsidiary of Hunan Valin Pipeline, and will be supplied with hot-rolled coils by Lianyuan Iron and Steel to the joint venture. This company's annual production capacity will reach 1.2 million tons of sheet metal, mainly used in the automotive industry. Its product line includes cold-rolled steel, galvanized annealed steel, and pure galvanized steel plates.
Lakshmi Mittal, Chairman and CEO of ArcelorMittal, said, "We have been working closely with Valin Pipeline for three years and everything is progressing smoothly. This automotive board joint venture is part of our global and China strategy, aimed at providing high value-added products through ArcelorMittal's technical support to better serve our global and domestic automotive customers
Li Xiaowei, Chairman of Hualing Pipeline, stated that Hunan's resource disadvantage of lacking coal and minerals, as well as its geographical disadvantage of relatively high logistics costs, determine that the development of Hualing Steel's main business can only take the path of structural adjustment and entering the high-end products of the industry. The development of Valin Steel's main business during the 11th Five Year Plan period will rely on the support of the technology platform jointly built with ArcelorMittal, aiming at the demand of the high-end product market, continuously improving product added value and market competitiveness.
On June 22, Mattes, CEO of ArcelorMittal China, said in an interview with reporters, "In November last year, ArcelorMittal and Valin signed a strategic framework cooperation agreement, which mentioned high value-added platform products, such as automotive steel plates and other higher value-added products. We will further develop in automotive steel plates and silicon steel with Valin
Matthias said that ArcelorMittal Brazil also has a subsidiary, Acos Longos, which has very advanced technology in curved silicon steel and hopes to bring the technology of curved silicon steel, including steel plates, to Valin.
QST technology introduced to China Oriental
Matthias said that ArcelorMittal has been cooperating with Valin for two years, and the cooperation with China Eastern Group has just begun. It will take time to prove the success of the joint venture. As of now, ArcelorMittal's investment in China has exceeded 1.5 billion US dollars. In addition to cooperating with Oriental Group and Valin Group, there will be other investment plans in China.
Matthias said that China Eastern Group mainly produces H-beams, including some large steels. ArcelorMittal is a global leader in the production of H-beams, especially heavy-duty H-beams. The company hopes to make more breakthroughs in the production of H-beams with China Eastern and will introduce its technology in H-beams and steel sheet piles to China Eastern.
Matthias revealed that ArcelorMittal is preparing to provide China Eastern Group with QST technology for H-beams, which is entirely a tempering technology developed by them. Magang, Laigang, and other companies can also produce H-beams, but using QST technology can reduce the weight of H-beams by 20% -30%, while ensuring good strength and weldability, even stronger than traditional H-beams.
In addition, ArcelorMittal also hopes to introduce more advanced technologies in the fields of long materials and construction materials to China Eastern Group. ArcelorMittal is a global leader in the development of steel sheet pile technology. Currently, ArcelorMittal's steel sheet piles are used in the construction of Caofeidian Port, Waigaoqiao in Shanghai, and Chongming Island.
Matthias said that steel wire is a very high-end product, mainly used to reinforce car tires. The number of cars in China is increasing year by year, and a large number of tires need to be reinforced. So the company hopes to make more investments in steel connections in China. At present, ArcelorMittal has a factory in Shandong that specializes in producing steel wire connections.
Matthias revealed that China's Ansteel and a Belgian company are collaborating on steel connections, and ArcelorMittal will also have some cooperation with Ansteel to develop high-end products in Chongqing.