China's Zhejiang Yongjin to launch $276m stainless steel project

BEIJING, June 26 (Reuters) – China's Zhejiang Yongjin Metal Technology Co will invest 1.81 billion yuan ($276 million) to build a precision stainless steel processing project in the south of the country, a company spokeswoman said on Tuesday.

The project in Yangjiang city in Guangdong province is scheduled to launch by the end of 2020, producing high-quality stainless steel strips with an annual capacity of 680,000 tonnes. Zhejiang Yongjin and its two subsidiaries, Jiangsu Yongjin and Fujian Yongjin, currently have a combined production capacity of 1.58 billion tonnes of steel.

"The new capacity will be close to our major market of Foshan city in Guangdong, and also close to our raw material supplier, Guangdong Guangqing Metal Technology Co," the spokeswoman told Reuters by telephone.

Guangqing, a joint venture created by Tsingshan Holding Group Co and state-backed Guangdong Guangxin Holding Group , has annual nickel-alloy production capacity of 300,000 tonnes and stainless steel billet capacity of 2 million tonnes.

Last month, Yongjin and Guangqing signed a cooperation agreement on hot-rolled stainless steel coil supply, but did not reveal details of the contract.

The new project is also in line with Yangjiang's target of creating a stainless steel industry in the city worth over 100 billion yuan by 2020.

The first phase of the project is due to open in July 2019, with capacity of 300,000 tonnes per annual.

China is expected to have 37 million tonnes of stainless steel capacity by 2018, according to an industry association. ($1 = 6.5519 Chinese yuan renminbi)

(Reporting by Muyu Xu and Josephine Mason; Editing by Joseph Radford)