Chinese steelmakers have been increasingly removed from urban areas in recent years for environmental reasons. This has combined with a move towards installing more coastal steel capacity which is cutting costs and boosting competitiveness, Kallanish notes.
The Chinese steel industry is undergoing a steady shift from production sites near natural resources to locations near the coast. China has formed five major coastal steel bases, which contain over 100 million tonnes/year of commissioned, under-construction and planned steel capacity.
In Laioning province, Angang’s Bayuquan facility was commissioned in September 2008 with 6.2m t/y of iron and steel capacity, whilst Minmentals Yingkou has another 6m t/y. Hebei’s Caofeidian will contain around one quarter of Tangshan’s total steelmaking capacity, at over 20m t/y, including the existing Shougang Jingtang plant, Tangshan Stainless and Tangyin Steel. Shandong has coastal steelmaking capacity of 40m t/y. The Shandong government expects coastal steel capacity to reach 70% of the whole provincial capability, with 40m t/y capacity in the city of Rizhao alone. Rizhao contains both Rizhao Steel and the new Shandong Iron and Steel plant.
In Guangxi province, Fangchenggang expects to see iron and steel output from the coastal base of around 330,000 tonnes and 1.97 million tonnes respectively in 2019. The Liuzhou Iron & Steel plant there has a planned crude steel capacity of 14.7m t/y however and will be ramping up over the coming years. Guangxi Shenglong is also building a 3.4m t/y steelworks there. Baowu Group’s Zhanjiang plant meanwhile is adding a new phase and expects to reach 12.53m t/y of crude steel capacity.
As China moves more capacity to the coast, its mills will benefit from lower costs to move both raw amterials and steel. This will make them more competitive in export markets as well as domestically, over time. Costs are also being reduced by the replacement of small funaces with larger ones and the installation of more modern equipment.
