Magang Group unveils upstream revamp

Magang Group Holding Co (Magang), located in Central China’s Anhui province, plans to remove old facilities at two subsidiaries to pave the way for installation of new iron and steelmaking capacity including environmentally friendlier electric furnaces, according to an announcement Wednesday from the Anhui Economic and Information Technology Committee.

Maanshan Iron & Steel Co, the listed-arm of Magang, intends to build two 100-tonne EAFs with a total steelmaking capacity of 1.5 million tonnes/year at its works in Yushan District, Ma’anshan. Construction will start in June 2020 with the new facilities expected to commission around December 2022. The steelmaker’s plans are open for public review during July 25-August 31.

For the project to proceed however, Magang Group must comply with the Chinese central government’s ‘capacity swap’ regulations requiring it to remove facilities of similar or greater capacity. Magang has elected to remove two 50t converters which have a total steelmaking capacity of 1.52 million t/y which would be completely dismantled when the new facilities are commissioning. However, during construction and ramp up the converters will likely operate as normal, a Magang official said.

Meanwhile, another Magang subsidiary, Anhui Changjiang Iron & Steel Co whose works is located 15kms south of Maanshan’s in Dangtu county, is taking the EAF route as well and planning to build a 140t EAF of 1.1 million t/y capacity. Construction will start from March 2019 and take about two years.

In exchange, Changjiang is to scrap two 40t converters whose total steelmaking capacity is 1.2 million t/y. These will be stopped and scrapped after the electric furnaces come on-stream.

In tandem with construction of the EAF at Changjiang, the company will also take down a 450 cu m blast furnace at the Dangtu works sometime before March 2021. Significantly however, the company plans to keep that furnace’s 550,000 t/y iron-making capacity ‘quota’ available for swapping for any upstream expansion project at a later date.

“The facilities to be dismantled are all small volume (so) if the government decides to toughen the environmental requirements of industrial enterprises to further help improve air quality in the future, the units would be eliminated anyway,” Magang’s official remarked. “Thus, we have decided to directly build new ones, which are larger and could be more in line with safety and environmental needs.” Most of the new capacity would be used to produce longs, he told Mysteel.

Listed on both the Shanghai and Hong Kong stock exchanges, Magang is one of China’s top ten steelmakers in terms of production, with its crude steel capacity at 22.98 million t/y. Its actual crude steel output last year was 19.7 million tonnes.

Written by Anna Wu, wub@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com