Kobe Steel Ltd., Tokyo, and the Chinese company Jiangsu ALCHA Aluminium Co. Ltd. have terminated their letter of intent to form a joint venture (JV) to produce aluminum coil and sheet in China.
The two companies had initially announced the joint venture In December 2011. The goal of the JV was to conduct a detailed feasibility study to establish a facility in Baotou, Inner Mongolia, to produce and sell aluminum coil and sheet. Kobe Steel was to own 80 percent of the JV, while ALCHA was to own 20 percent. The slated capacity of the facility was to be about 200,000 metric tons per year.
According to Kobe Steel, while conducting the feasibility study the two companies had differences and were unable to reach agreement. As a result, Kobe Steel and ALCA decided to allow the letter of intent to expire on Dec. 30, 2012.
China’s demand for aluminum sheet for automobiles and beverage cans, also applications of interest to Kobe Steel, is anticipated to grow sharply in the coming years. Kobe Steel says it will continue to study the possibility of establishing a production base for aluminum sheet in China.