Review of China steel capacity-swap plans in 2023
Together, about 37.43 million tonnes/year of ironmaking capacity in blast furnaces and 38.11 million t/y of steelmaking capacity in electric arc furnaces and converters this year have been planned to be installed; meanwhile, a total of 49.8 million t/y of old ironmaking capacity and 50.2 million t/y of steelmaking capacity will be removed.
The steelmakers involved are mainly located in major steel-producing provinces in the country, including East China's Jiangsu and Shandong and Northeast China's Liaoning.
Of these, some steel mills have already started implementing their capacity-swap plans after receiving approvals from the provincial governments, while for some others, their plans are still subject to public scrutiny and comment.
Most plans will commence construction in the coming two years, but there are also a few scheduled to wait for a longer time, with the latest to begin in 2027, Mysteel Global has learned.
To add new facilities, Chinese steelmakers need to meet the country's long-standing capacity swap regulations which demand that whenever new iron- or steelmaking capacity is introduced, old facilities of at least the same productive capacity in operation at the time need to be stopped and eventually scrapped, either capacity mills already owned or capacity they have "purchased" from other steelmakers, as reported.
The old-for-new swap ratio for BFs must be no less than 1.5:1 in areas that are susceptible to atmospheric pollution such as the Beijing-Tianjin-Hebei region, while the ratio for EAFs is set at 1:1, Mysteel Global notes.
Written by Carly Chen, chenziyi@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
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