TOKYO Nippon Steel & Sumikin Stainless Steel Corp. (NSSC) has canceled plans to open a stainless cold-rolling mill in Nantong, Jiangsu province, in a joint venture with Xinan Stainless Steel Co. Ltd.
"The project has been completely canceled, not just delayed, due to a change in the business situation," a senior NSSC executive told AMM sister publication Steel First.
Production at the 200,000-tonne-per-year plant was slated to start in June 2014, but Japans largest stainless steel producer said the partners have decided to abandon the project due to a worsening outlook for demand conditions amid a glut of stainless steel supply in China.
The plantin which Xinan Stainless was to take a 40-percent stake, NSSC 25 percent and trading house Sumitomo Corp. 35 percentwas due to cost 1.5 billion yuan ($15.3 million) to construct.
The scrapping of the project will be a big blow to Xixan Stainless, which had been looking to use it to expand and diversify its production. The company currently has an annual capacity of 600,000 tonnes of hot-rolled stainless coils.
A version of this article was first published in AMM sister publication Steel First.