(Yicai) July 24 -- Nippon Steel, Japan’s biggest steelmaker, will exit a 20-year joint venture with Chinese state-owned metals giant Baoshan Iron and Steel.

Nippon Steel will sell its half of Baosteel-Nippon Steel Automotive Steel Sheets to Baosteel for CNY1.8 billion (USD247.4 million) on Aug. 29, its Shanghai-based parent company said yesterday.

BNA was set up in Shanghai by Baosteel, Nippon Steel, and European steel producer Arcelor-Mittal in 2004. In 2011, Arcelor-Mittal sold its entire 12 percent stake to Nippon Steel.

BNA can make 900,000 tons of cold-roll steel sheets and 1.3 million tons of hot-dip galvanized steel sheets a year, according to data released earlier by Baosteel. BNA’s 2.2-million-ton capacity is relatively small compared with Baosteel’s at about 12 million tons.

As car demand continues to grow in China, the profitability of Chinese producers of steel auto sheets has been relatively good. Auto steel consumption is expected to reach a record high of 61 million tons this year, China Central Television’s new website reported earlier this year, citing industry analysts.

Baosteel’s shares [SHA: 600019] closed 0.4 percent higher at CNY6.96 (96 US cents) in Shanghai today. The stock is up more than 17 percent since the end of last year. Nippon Steel [TYO: 5401] fell  1.5 percent in Tokyo.

Editor: Futura Costaglione