Japan's Kobe Steel eyes auto panel JV with China Baowu

Kobe Steel

26/02/2024 08:09

TOKYO, Feb 26 (Reuters) - Kobe Steel  5406.T , Japan's
third-biggest steelmaker, said it aimed to expand its automotive
aluminium panel business in China through a joint venture with
China Baowu Steel Group as a shift to electric vehicles drives
demand for new cars. 
    China Baowu, the world's largest steelmaker, via a unit, has
agreed to proceed with feasibility study to form a joint venture
with Kobe Steel's local unit, the Japanese company said on
Monday, with an aim to set up the business this year. 
    The deal would allow Kobe Steel to benefit from a forecast
3% annual rise in automobile production in China annually
through 2030 due to a shift to EVs, the Japanese company said.
    China Baowu said on its WeChat account on Friday that it
intended to build an automotive aluminium sheet joint venture
with Kobe Steel to accelerate the trend toward lightweight
materials in the auto industry.
    China is Japan's biggest trading partner but relations
between the two major economies have not always been easy. China
last year banned imports of seafood from Japan following start
of release of treated water from the wrecked Fukushima nuclear
power plant. 
    China's BYD  002594.SZ  overtook Tesla  TSLA.O  as the
world's biggest EV maker in the fourth quarter of last year, and
major U.S. and European auto manufacturers are pushing hard to
cut costs under pressure from Chinese competitors.  
    Kobe Steel's announcement comes as the Biden administration
is examining rival Nippon Steel's  5401.T  China connections in
relation to its planned acquisition of American rival U.S. Steel
 X.N , according to media reports. 
    The Biden administration sees protecting the U.S. industry
as its priority and is worried about Nippon Steel's exposure to
China, Bloomberg News reported last week, citing people familiar
with the matter.         

 (Reporting by Katya Golubkova and Kantaro Komiya in Tokyo;
Additional reporting by Amy Lv in Beijing; Editing by Jamie
Freed)
 ((ekaterina.golubkova@thomsonreuters.com;))