Baoshan Iron & Steel Co plans to commission a new 400,000-ton-a-year heavy plate line this month, hoping that one of its most profitable businesses can offset weaker sectors hit by the economic slowdown.

This will bring its annual capacity in Shanghai to 1.8 million tons for heavy plates, used mainly in shipbuilding, ocean industries and energy pipes, and by defense industries.

Tang Wensheng, a deputy manager of Baosteel's heavy plate mill, said it has secured several key orders from South Korean ship builders Hyundai Heavy Industries Co and Samsung Heavy Industries Co for next year and is in talks with Japanese makers.

China canceled a 5-percent export tariff on ship plates this month, according to the China Ship News, a move that will give Chinese products an advantage in pricing for shipbuilding nations like South Korea.

Compared with shipbuilding competitors and other industries, South Korea's shipbuilding sector is not very affected by the spreading economic downtown thanks to multi-year order backlogs, analysts said. And the depreciating won is providing even more dominance for Korean shipyards, Citigroup's Sokje Lee said in a note.

Baosteel's Tang said heavy plates now represent the company's most profitable sector.

(Shanghai Daily December 3, 2008)