Iron Ore and Steel News Roundup

SHANGHAI, Jul 19 (SMM) - A roundup of the ferrous metals headlines of the week.

1. Baosteel Zhanjiang to commission 5050 m³ blast furnace in August

Recently, the Department of Industry and Information Technology of Guangdong Province issued a capacity replacement adjustment programme for three blast furnace projects of Baosteel Zhanjiang Iron and Steel.The 1280 m³ BF (1.1 million mt of iron making capacity) of Shanghai Meishan Iron and Steel, which was originally scheduled to be replaced, will not be shut. Instead, the remaining 1.1 million mt of iron making capacity of the 2200 m³ BF of Wuhan Iron and Steel will be replaced. No adjustments have been made to capacity replacement plans of other blast furnaces.  

According to the latest programme, Baosteel Zhanjiang plans to build a 5050 m³ BF and a 350 mt converter, with an iron making capacity of 4.02 million mt and a steel making capacity of 3.625 million mt. The projects that are to be replaced include one 2500 m³ blast furnace, one 750 m³ blast furnace, two 150 mt converters, and one 120 mt converter of Shanghai Baosteel Stainless Steel, with an iron making capacity of 2.93 million mt and steel making capacity of 3.63 million mt, as well as one 2200 m³ BF of Wuhan Iron and Steel, with an iron making capacity of 1.1 million mt. 

2. China Baowu mulling over strategic reorganisation of Shandong Iron and Steel Group

The Shandong Provincial State-owned Assets Supervision and Administration Commission announced on July 14 that it, together with China Baowu, is mulling over strategic reorganisation of Shandong Iron and Steel Group in order to implement the iron and steel industry plan in Shandong and promote the optimisation and structural adjustment of the iron and steel industry.

China Baowu is currently the largest steel company in both China and the world, with a crude steel output of 115 million mt in 2020. Shandong Iron and Steel Group is the seventh largest steel company in China, with a crude steel output of 31.11 million mt last year. The five steel companies that rank between China Baowu and Shandong Iron and Steel Group are Angang Group, which is an central state-owned enterprise, Shougang Group and Hebei Iron & Steel Group, which are state-owned enterprises, and Shagang Group and Beijing Jianlong Heavy Industry, which are giant private steel companies.

After the merger of China Baowu and Shandong Iron and Steel Group, the annual output of crude steel of the new company will be close to 150 million mt, which will account for 14% of China's total crude steel output.

3. NDRC to release over 10 million mt of coal reserves, strictly reviews capacity reduction of steel and coal

The Chinese government has released more than 5 million mt of national coal reserves to the market in four times based on the coal supply and demand situation since the beginning of this year. In order to ensure the supply of coal during the peak summer season, NDRC has formulated a reserve release plan of over 10 million mt of coal in advance. 

The released resources will be transferred to dozens of coal storage bases and ports as needed. The coal reserve resources will be organised in batches to be put into the market in an orderly manner to ensure a stable supply of coal. At present, China has established government dispatchable coal reserve capacities of over 100 million mt, and the reserve base currently stores about 40 million mt of coal.

Zhao Penggao, deputy director of NDRC Department of Environmental Resources, stated on the July 13 that China will vigorously promote the adjustment and optimisation of the industrial structure, focus on curb the blind development of the projects with high consumption of energy and resources, strictly control incremental projects, and accelerate the transformation and upgrading of existing projects. China will strictly review the capacity reduction of steel and coal industries and prevent the resurgence of excess capacities.