Major Chinese steel mills Anshan Steel and Jinan Steel have been active during the first quarter of 2007 in creating long-term supply agreements for steel ship plate with various shipbuilding companies.

By end-March 2007, Anshan Steel, based in northeastern China's Liaoning province, had signed a long-term ship plate supply agreement totalling approximately 600,000 mt/year of plate with various Chinese shipbuilding companies. These included the China Ocean Shipping Group, the Bohai Shipbuilding Heavy Industry Company, and the Dalian Shipbuilding Industry Company, according to sources at Anshan Steel. Anshan Steel's ship plate production capacity is reported to be at least 1.2 million mt/year.

"We (Anshan Steel) can supply ship plate with a maximum thickness of 100 mm," one Anshan Steel source told Platts. Base prices for Anshan Steel's ship plates currently range from Yuan 4,800-11,200 ($621-1,450)/mt, depending on the thickness and strength of the different types of plate. Prices for long-term supplies, however, will be set on an annual basis.

Jinan Steel, based in eastern China's Shandong province, set up a joint venture with Shandong Weihai Shipyard in March 2007, according to a source at the shipyard. The source said the JV is dedicated to the processing and distribution of shipbuilding-oriented steels. With a total investment of approximately Yuan 80 million, the joint venture has a design steel processing and distribution capacity of around 500,000 mt/year. This compares to Jinan Steel's steel plate production capacity of around 600,000 mt/year, with a maximum thickness of 30 mm.