China's Shandong Province to Have Only 5-6 Steelmakers by 2015, Down from 21

JINAN, Feb. 21 (Platts) -- China's Shandong province has decided to cut the number of steelmakers to five or six by 2015, down from 21, according to the steel industry restructuring guidelines released by the provincial government Monday.

According to the guidelines, Shandong Iron and Steel Group will complete its consolidation with Rizhao Steel and Qingdao Steel in 2013.

Shandong Province's combined steelmaking capacity will be about 50 million mt/year by 2015, down from the current capacity of over 70 million mt/year.

Shandong province will eliminate inefficient steelmaking capacity totaling 22.57 million mt/year and iron-making capacity totaling 21.11 million mt/year by 2015. All blast furnaces with an effective capacity of less than 1,000 cubic meters each and converters with an effective capacity of less than 80 mt each will be shut down by the end of 2015.

As replacement, Shandong province will build a steelmaking base at Rizhao Port with a design steelmaking capacity of 8.5 million mt/year.

To ensure iron ore supplies, Shandong-based steelmakers will develop two to three overseas iron ore bases by 2015, hopefully in Australia, South America and Africa. The guidelines also pledged support to Shandong Iron and Steel Group's investment in the Tonkolili iron project in Sierra Leone.

Also, by 2020, captive iron ore supplies will be able to meet two thirds of Shandong-based steelmakers' iron ore demand.