Japanese Steel Companies to Boost Automotive Wire Production in Asia

To cope with the increasing car capacity in Asia, the Japanese steel giant Kobe Steel plans to increase production of wires used for engine parts and fasteners. It will invest 2 billion yens in its China-based joint venture, Kobe Special Steel Wire Products (Pinghu) Co.,Ltd, for new equipment installation. The new manufacturing equipment is expected to start operation in 2015, pushing annual wire capacity from 30 thousand tons to 50 thousand tons and driving Asia wire capacity up by 10%.

The investment targets wires for high-strength bolts, bearings and other critical automotive components. A car uses around 250 kilograms of wires on average. Kobe Steel is a major maker for automotive wires with production bases in the US and Asia and a total 250 thousand annual overseas capacity of wires. Statistics show that in 2013 Asia (including Australia) car capacity grew 4.6% to 45.75 million units, which is 52% of global capacity, 2.3 times more than European capacity, and 3.4 time more than North American capacity. Volkswagen announced the establishment of 2 plants in China with 500 thousand annual capacity respectively; Nissan's new plant in Dlian City is expected to launch production this year (2014).

Apart from Kobe Steel, Nippon Steel & Sumitomo Metal decided to invest 3.2 billion yens in a new wire plant in Jiangsu Province, which is expected to launch production in June 2015. This is because China's current wire capacity is over-loaded.