BEIJING, June 19 (Reuters) - China’s Baoshan Iron and Steel Co Ltd (Baosteel), the country’s largest listed steel producer, will begin test production at an aluminium project in Henan province in mid-2020, according to the industrial zone hosting the plant.
The first phase of Baosteel’s aluminium alloy casting and deep processing plant will have a capacity of 300,000 tonnes per year and involve an investment of 6.14 billion yuan ($889.35 million), the Sanmenxia City Urban and Rural Integration Demonstration Zone said in a statement posted on its website.
The steel giant’s move into aluminium underscores diversification efforts by steel companies in China, where the prospects for demand growth from the downstream sector are uncertain.
Baosteel had previously stated its strategic intention to move into the automotive aluminium sector. Last year, affiliate Baosteel Metal took a stake in Nanjing Yunhai Special Metals , which also makes aluminium alloy.
Construction will be completed and production will be on trial in June 2020, the Sanmenxia statement added.
The project is targeting annual sales revenue of 6.08 billion yuan after its launch, the statement added. Its total planned capacity is 600,000 tonnes per year.
Basoteel, which is partnered in the project by Henan Energy and Chemical Industry Group and the Sanmenxia municipal government, did not immediately respond to Reuters’ request for comment.
$1 = 6.9039 Chinese yuan Reporting by Tom Daly, Editing by Sherry Jacob-Phillips