China Industrial Economy News reported that Shougang Group has signed strategic cooperative framework agreements or annual supply agreements with some China major auto makers including Saic Group’s Beijing Automotive Industry Holding Co, Geely Holding Group and Great Wall Motor Co Ltd, a sign that the steel group has been able to provide quality steel sheet in bulk for auto sector.
As cost is constantly moving up, this pattern of cooperative alliance will help stabilize cost effectiveness and realize mutual benefit so as to ensure the steel demand and supply and auto sales on the even keel.
According to Mr Wang Qinghai GM of Shougang Group they will witness the output of auto steel sheet hitting 500,000 tonnes in 2010 and they will try to forge an influential brand for their auto products by 2014.
The chief of the Research Department of Baosteel Group at the seminar lately held on auto steel production and application technology said that the steel industry should extend their research and development antenna into auto sector and jointly resolve problems in auto steel application.
Similar appeals can often be found in the interviews by the paper. But the paper learned from small and medium steel makers that they feel baffled in cooperation with auto producers and have to put themselves on the arena of fierce homogenization competition because of their lack of their own characteristic steel products.
A manager of Hebei-based medium steel mill said "We also hope to development competitive products but difficulties are concrete when taking account such respects as the cooperation pattern and the investment in research and development. Major steel mills boast sufficient finance and accredited reputation, so it is easier for them to come to terms with auto makers."
Undoubtedly, Chinese auto sector is among the biggest consumers of steel products. Over 10 million vehicles have been traded in China this year. But the auto sector is experiencing significant changes nowadays into lightness, low emission, service lifetime, low cost and high safety, which call for new and improved steel products instead.
