Nippon Steel will spend US$300m building a steel galvanising production line in Thailand to supply automotive sheet steel by 2013, its sixth overseas automotive sheet production line.

Rival JFE Steel also plans to build a $300m galvanising line in Thailand, which will also become operational in 2013, Reuters noted.

"We expect car output in Thailand to increase to 2-2.5m units within a few years, up from 1.64m units in 2010," Shinichi Nakamura, general manager at Nippon Steel, told a news conference.

Nippon Steel currently exports galvanised sheet steel to Japanese automakers operating in Thailand.

Its new Thai line will be capable of producing 360,000 tonnes per year. Its 45%-owned Thai affiliate, Siam United Steel, will supply cold rolled sheet steel to the new company.

Nippon Steel also has steel galvanising lines in China, the United States and Brazil through joint ventures with local partners.

It plans to build a 400,000 tonnes a year galvanising line in Mexico jointly with Latin American steel firm Ternium and plans build a 600,000 tonnes a year cold-rolled steel line jointly with Tata Steel in India, Reuters said.