Japanese steelmaker Kobe Steel has announced that its Chinese affiliate company, Kobe Special Steel Wire Products (Pinghu) Company (or KSP), has started up its new pickling equipment. Based in Pinghu, Zhejiang Province, KSP processes special steel wire rod into cold heating quality (CHQ) steel wire.

The new equipment increases production capacity to about 4.9kt metric tons per month, from 3.5kt metric tons per month. Kobe Steel originally announced the 1.3 billion-yen capital investment plan on10 November 2015.

KSP was established in 2007 to process steel wire rod into CHQ steel wire for supply mainly to Japanese-affiliated automotive parts manufacturers in China. The wire is used to make automotive bolts, nuts and other products. Full operation began in 2009. Kobe Steel provides 100% of the special steel wire rod as the base material to KSP.

Automobile production in China is anticipated to steadily rise to approximately 32 million units in 2025, forecasts Kobe Steel. Local procurement needs will similarly increase among Japanese-affiliated auto parts manufacturers. With the largest market share for CHQ wire, KSP enables Japanese-affiliated parts manufacturers in China to make high-quality parts from the same quality of material available in Japan.

Including KSP, Kobe Steel has a total of four locations that process wire rod into steel wire products used in automotive parts. The other three companies are Kobe Wire Products (Foshan) Co., Ltd., Kobelco Spring Wire (Foshan) Company, and Jiangyin Sugita Fasten Spring Wire Company.

China is the world’s largest car market, and demand for special steel is anticipated to remain strong. Through these companies, Kobe Steel aims to continue meeting the local procurement needs of automobile and car parts manufacturers in China.