Baosteel Group, China's largest steelmaker, began work on a 6 billion yuan (US$750 million) facility yesterday to produce special steel.

Xie Wei, general manager of Baosteel's special steel branch, said yesterday that the high-end alloy steel project is part of Baosteel's efforts to build itself into a world-leading research and production base for special steel.

The alloy steel project is expected to produce 360,000 tons of steel plates and coils each year when it is completed in May 2009.

Xie said these high-intensity steel products are meant for the emerging needs of industries such as aerospace, nuclear power, and oil and gas prospecting.

The special steel products will bring in around 8.3 billion yuan (US$1.04 billion) to the group each year.

The project, the group's largest-ever investment in special steel, will be the country's only large-scale special steel production line.

Jia Liangqun, an analyst at industry portal Mysteel.com, described the project as "forward-looking."

"China is now going all out to manufacture large and more technology-intensive equipment, which requires abundant steel with special features," Jia said.

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