Baosteel aims to complete new 10m t/y sheet plant by 2018
Last Update: 11/06/2012 08:15:15
Baosteel's new Zhanjiang steelworks project in southern China's Guangdong province is designed to produce hot rolled coil, cold rolled coil and coated sheet, targeting the auto, white goods, machinery, shipbuilding and construction industries, a source at Baosteel tells Platts Steel Business Briefing, giving details of the plant's configuration for the first time. Zhanjiang will house two 5,050 cubic metre blast furnaces, three 320-tonne converters, one 2,250mm and one 1,780mm hot strip mill, one 2,030mm cold strip mill and some hot-dip galvanizing lines. All construction is to be completed by 2018, adding 10m t/y to Baosteel's 45m t/y crude steel capacity. Last year Guangdong produced 13.24m tonnes of crude steel, so the Zhanjiang project could almost double the province's output. The construction of Zhanjiang – as well as Wuhan Iron & Steel's 10m t/y Fangchenggang works, only 200 km from Zhanjiang – has aroused concerns of overcapacity, although Baosteel notes that China's steelmakers are concentrated in the north and northeast while the south and northwest are in deficit. China's daily crude steel output has hovered at around 2.02-2.04m tonnes/day since April, pushing down steel prices amid weak demand. However, the record production levels equate to about 83% capacity utilisation. The China Iron & Steel Association estimates that capacity reached 900m t/y by the end of 2011. Some Guangdong traders believe local competition will become fiercer once the Zhanjiang and Fangchenggang steelworks are commissioned. However, the Baosteel source remains optimistic, saying China's economy has problems but remains on an upward trend, as does steel demand.
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