Feature: Baowu’s Zhanjiang expansion taking shape
More details have emerged about plans by Baowu Steel Group Corporation, China’s top steelmaker by capacity, to install a third blast furnace and converter at its Zhanjiang works in South China’s Guangdong province, Mysteel has learned. These were contained in an August 28 post released by Guangdong Economic and Information Commission announcing that the project is open for public review over August 28-September 27.
As Mysteel reported in early July, Shanghai-headquartered Baowu is building a third steelshop at its new Zhanjiang works that will have 4.02 million tonnes/year ironmaking capacity and 3.63 million t/y steelmaking capacity. Baowu, formed after the merger of Baosteel Group and Wuhan Iron & Steel Group in December 2016 and boasting a combined steel capacity of about 70 million t/y, had earlier announced its plans when it called for public comment over July 3-9.
The Guangdong EIC’s new call for public comment is significant because it shows that the provincial government is planning to accept the steelmaker’s nominated capacities and other details, Mysteel notes. In its post, the GEIC said that the new furnace would have an inner volume of 5,050 cu m – identical in volume to the two already installed at Zhanjiang – and a 350 tonne converter. Baoshan Steel, Baowu’s listed arm and headquartered in Shanghai, had fully commissioned the new 9.2 million t/y integrated steel works in Zhanjiang by the end of 2017, as reported.
Construction on the No.3 blast furnace will start in April 2019 with the new facility to be commissioned in July 2021, while that on the converter would begin in March 2019 for a planned commissioning by around March 2021, according to the GEIC post.
“China has been encouraging steelmakers to consolidate existing capacities and to build new advanced and eco-friendly equipment in coastal areas,” a Baowu official explained on September 5. “Also, this investment in upstream production is also helping us (Baowu) to raise efficiency and cut costs.”
Previously, the company had also said the expansion of upstream facilities at its new works is part of Beijing’s campaign to upgrade steel facilities via eliminating outdated capacity – a crucial factor in Baowu’s plans. This is because Chinese steel producers are forbidden from adding new iron and steel facilities without old facilities of equivalent or greater capacity being scrapped.
Thus, to secure government approval for adding the new capacity in Guangdong, Baowu has elected to dismantle old capacity at works of other group steelmakers, namely 2.93 million t/y of ironmaking and 4.55 million t/y of steelmaking capacities from Baosteel Stainless Steel Co, located in East China’s Shanghai, and 1.18 million t/y of ironmaking capacity from Shanghai Meishan Iron & Steel Co, headquartered in Nanjing City in East China’s Jiangsu province, as reported.
A 1,280 cu m blast furnace at Meishan Steel, with 1.18 million t/y ironmaking capacity, is to be dismantled with the demolition work starting in February 2021 and to be completed in June 2021, Mysteel understands.
At Baosteel Stainless, a 2,500 cu m blast furnace and a 750 cu m blast furnace will be stopped in January 2021, with the scrapping down of the units expected to take six months until June 2021. Ahead of these, dismantling of a 150 t converter and a 120 t converter would start in October 2020 and last for five months until February 2021, while later this year another 150 t converter is to be torn down between October and December this year, according to the GEIC post.
The ironmaking capacity of those facilities at Baosteel Stainless waiting to be dismantled totals 2.93 million t/y and the total steelmaking capacity at 4.55 million t/y. Baosteel Stainless permanently shut its carbon and stainless slab mills last June in Baoshan district, Shanghai, after 17 years of operations, moving the capacity to South China, as Mysteel reported.
“Except for those capacities to be used in new facilities, the remaining capacities will be used in other projects, and the old facilities will remain in normal production until they are stopped for demolition,” the official added.
Currently at Zhanjiang, in addition to the two blast furnaces the works hosts a 2,250mm hot strip mill of 5.5 million mt/y capacity, one 4,200mm plate mill of 1.6 million mt/y capacity, one 2,030mm cold strip mill of 2.2 million mt/y capacity and one 1,550mm cold strip mill of 2.55 million mt/y capacity.
Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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