Shanxi Taigang Stainless Steel Co. would more than double its capacity by the end of 2006 by building a 1.5 million-ton plant, a senior company official said.

Taigang, China’s top stainless steel producer, was also considering investing in overseas nickel mines to cover its rising consumption of the metal, which is used to add strength and sheen to stainless steel, he said.

“The plant will cost 16.8 billion yuan (US$2 billion). We will finance it from our internal funds and bank loans,” the Taigang official said late Monday. China’s stainless steel output was expected to grow almost 20 percent to 2.3 million tons this year on soaring demand from the construction, automotive and household appliance sectors, Beijing-based analyst group, Antaike, said last month.

China consumes around a quarter of the world’s stainless steel and it imports more than half of its requirements.

Taigang’s new plant will bring capacity to 2.5 million tons a year by the end of 2006 from one million tons currently.

The company’s output is expected to reach 750,000 tons this year from last year’s 670,000 tons. It will still be operating below capacity because it slowed production in the first half of the year for upgrading projects.

Taigang planned to run at full capacity in 2005, he said.

The Taigang official said the company was interested in investing in high-quality, overseas nickel assets, as China’s own production was struggling to keep up with stainless steel demand.

(Shenzhen Daily October 21, 2004)