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Eyeing Auto Market, Aluminum Firms Hike Chinese Output -Nikkei
Jul 28,2010 14:33CST
industry news

TOKYO, July 28 -- Nippon Light Metal Co. (5701.TO), Mitsubishi Aluminum Co. and other top aluminum firms are ramping up output of auto-use products in China to meet demand in the world's biggest car market, the Nikkei reported in its Wednesday morning edition.

Nippon Light Metal will fork out Y300 million to increase sunroof rail assembly lines at its Shanghai plant from seven to 12 this fiscal year. The rails will be made from rod-shaped raw materials purchased from local manufacturers.

Spending Y850 million, Mitsubishi Aluminum next year intends to double annual production of an aluminum material used in heat exchangers to 5,280 tons from the current 2,640 tons. The material is made by a Chinese subsidiary in Jiangsu Province.

Kobe Steel Ltd. (5406.TO) will build a plant in Jiangsu Province to churn out forged aluminum products for car suspensions. Output is scheduled to begin in 2012, with production capacity set at 70,000-80,000 units a month. Kobe Steel, which will invest Y2.5 billion in the plant, will market the products to Japanese, U.S. and European automakers in China and could increase output down the road.

Meanwhile, Sumitomo Light Metal Industries Ltd. (5738.TO) plans to spend Y500 million to add a line to cut coils from aluminum sheets at a Jiangsu Province facility this fiscal year. Currently, coils are cut in Japan and shipped to China for final processing. To swiftly meet customer demands, the company will cut and process the coils in China.

To date, the bulk of aluminum products have been made domestically. By beefing up Chinese output, the companies aim to slash production costs. The yen's strength has also hurt price competitiveness.

Aluminum is roughly one-third less the weight of a similar-size piece of steel. And its use in autos as a lightweight material is increasing in order to improve fuel efficiency. And since auto production is ballooning in China, the market for aluminum components is also expected to swell.


Aluminum Al

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