(Yicai Global) Jan. 17 -- JFE Steel, Japan's second-largest steelmaker, and an affiliate of state-owned China Baowu Steel Group have joined hands to produce high-grade bar steel to seize opportunities in China's car sector.

JFE Steel and SGIS Songshan penned an agreement to set up a joint venture in southern China's Shaoguan, the Shanghai-headquartered parent said in a statement on its WeChat account, without disclosing the scale of investment.

The pair will explore the global steel market too, the statement added.

Baowu and the Tokyo-based firm have partnered before by establishing Guangzhou JFE Steel Sheet in 2003 and Shanghai Baowu JFE Clean Iron Powder in 2017.

JFE Steel, which was formed in 2002 through a merger of Japan's Kawasaki Steel and NKK, exports its products around the world. It is second only to Nippon Steel on the home turf.

Editor: Emmi Laine