The state-backed Japan Bank for International Co-operation has agreed with JFE Steel to loan $58mn, which will be co-financed with unspecified loans provided by the country's private-sector Mizuho Bank.

The loan is aimed to finance a part of JFE's spending of 686mn yuan ($104mn) to acquire a 50pc stake in BSSS – a wholly owned subsidiary of its Chinese partner Guangdong Shaoguan Iron and Steel Songshan (SGIS). SGIS' parent company is China's biggest steelmaker state-controlled Baowu. SGIS holds the other 50pc in BSSS.

US automotive producers and other steel-intensive manufacturers are facing a supply shortage which could potentially lead to production shutdowns or reductions, according to numerous market sources.

Since October, multiple flat-rolled service center sources have noted the lack of steel availability was of growing concern to OEM customers, particularly automotive, as demand was outpacing supply.