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SHENYANG, April 19 -- China's Ansteel said Monday that it has opened a new steel plant for high-end steel products used in auto and home appliance manufacturing as the steel maker seeks to improve its product offerings amid oversupply of low-end steel and weak demand.

The new plant, based in Guangzhou, capital of south China's Guangdong Province, is part of a joint venture Ansteel formed with Guangzhou Automobile Group and ThyssenKrupp to tap into steel demand by automakers.

The first stage of the plant cost 1.5 billion yuan and aims for annual production of 450,000 tonnes of steel plates used in vehicles and high quality home appliances.

The Pearl River Delta in south China is an important base for auto and home appliance manufacturing. Ansteel's vice president Yao Lin said building a presence in Guangzhou allows the steelmaker to bring its steel products to some of the country's most important buyers.

China aims to reduce crude steel production by 100 - 150 million tonnes over the next five years and encourage steel makers to work with downstream steel consumers to promote the use of high quality steel products in sectors ranging from auto and machinery manufacturing to power and shipbuilding.