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Kallanish Kallanish

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April, 10th 2020

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FEB 12
02:52

Baosteel anticipates negative growth for China automotive sector

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China’s Baosteel believes that its previous estimate that the Chinese automotive industry would see positive growth is now unlikely to be realised, official company sources suggest. It now expects to see negative growth in 2020, Kallanish notes. 

Automotive market demand has been stuck at low levels since vehicle manufacturers entered the holiday period in January. Combined with the coronavirus epidemic, this weak demand may last for several months. In the next couple of months, the steelmaker’s auto sheet business may feel the pressure as orders dwindle, it says. Its February order book is full however and Baosteel says it is likely to complete its March sales target.

Baosteel insists nevertheless that it has good expectations for new-energy vehicles. It anticipates two kinds of steel products will be the focus for new manufacturing, high strength auto sheet, and non-grain oriented electrical steel. In 2019, Baosteel announced its plan to add a new production line of non-oriented electrical steel with capacity of 200,000 tonnes/year. It has begun supplying both autosheet and electrical steel to Tesla's new factory in Shanghai.