China's WISCO signs steel deal with Noble

SHANGHAI, Dec 6: Noble International Ltd, North America's largest producer of laser-welded steel products, has signed a joint venture agreement with Wuhan Iron and Steel (Group) Corp, China's number-three steel mill, Noble said.

Noble International, which has agreed to sell a 40 percent stake to Arcelor Mittal, hopes to enter the booming Chinese automotive market through the 50-50 laser-welded blank mill, the company said in a statement.

Noble and Wuhan Steel would each invest up to $1.25 million in cash in the venture, and they have already held talks with Chinese automakers about laser-welded blank production, it said.

China is projected to surpass the United States as the world's top automotive market by 2010, with output reaching 15 million units, a Chinese academic at a government think-tank said earlier this week.

The joint venture expects to obtain funding from financial institutions in China as needed, according to the Noble statement.

The Chinese steel mill, also known as WISCO, is the parent of Shanghai-listed Wuhan Iron and Steel Co. Ltd.

Noble said it expects the joint venture to receive final approval from the Chinese government in the first quarter of 2007, and it is forecast to begin laser-welded blank production during the second half.

WISCO spokesman Bai Fang confirmed the deal but declined to comment on the details.

China's mushrooming automotive industry is encouraging Chinese steel mills to produce more high-end products for the industry.

WISCO's two major competitors in China, Baoshan Iron and Steel Co. Ltd. and Angang New Steel, have launched their steel plate production lines to feed domestic automotive producers.

REUTERS