The world's leading steelmaker, ArcelorMittal, has said it will use its Chinese joint venture to tap into the country's booming car market, helping offset diminishing steel demand due to the slowing economy.
The company's joint venture with China's Hunan Valin Steel Co begins operating this month, with an annual production capacity estimated at 1.5 million tonnes; including hot and cold-rolled coils, and parts such as chassis and wheels.
"Demand for autos in China will continue to grow. Today, China produces about 20 million cars per year ... so there is demand for these kind of niche products, like the ultra light-weight auto steel," Lakshmi Mittal, the company's Chief Executive, told Reuters in an interview in central Hunan province.
China became the world's biggest auto market five years ago, with annual sales growing nearly 14 percent last year to smash through the 20 million mark, thanks to a burgeoning middle-class that is eager to spend.
ArcelorMittal, which set up the Hunan joint venture in 2010 to produce high-end automotive steels, said it has no further short-term expansion plans in Asia or elsewhere, despite steel demand gradually recovering in the U.S. and Europe.
"We don't need to grow our capacity in our business. We will supply more steel to Europe and America by increasing our utilisation," he said.