ArcelorMittal has formed a five billion-yuan ($730 million, Dh2.69 billion) venture to supply steel to automakers in China, the world's largest producer of cars.
The venture in Hunan Province will make 1.2 million metric tonnes a year of flat steel, Luxembourg-based ArcelorMittal said today in a statement. Hunan Valin Steel Tube & Wire Co. said in an exchange filing it will own 34 per cent of the venture, Hunan Valin Group will have 33 per cent and ArcelorMittal the rest.
Lakshmi Mittal, the founder and chief executive officer of ArcelorMittal, is expanding across Asia to feed booming construction and manufacturing. Volkswagen AG, Europe's largest carmaker, said last week that Chinese sales jumped 19 per cent from January to May. The country's vehicle sales may rise 15 per cent in 2008, state-owned Xinhua News Agency said June 22.
ArcelorMittal rose 41 cents, or 0.7 per cent, to 63.68 euros in Amsterdam trading. The stock has increased 20 per cent this year, giving the steelmaker a market value of 92.3 billion euros ($145 billion).
The company will raise European hot-rolled coil steel prices to 770 euros a tonne for new September deliveries because of "robust demand", it said on Friday in a separate statement. That is 50 euros more than the previous price stated in May.
Prices for hot-rolled coil in northern Europe have risen 39 per cent this year to 695 euros a tonne, according to data from Steel Business Briefing.
Mittal said June 24 that the world may be facing its first steel shortage in decades because of accelerating demand and a lack of investment in production. The company said on Friday it expected further price rises in forthcoming quarters because of "tight global supply" and continuing cost increases.
The company is trying to increase its own supplies of raw materials after coking coal prices tripled in a year and iron ore surged.
Source: Gulf News
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