Three Chinese steelmakers plan to upgrade capacity in 2024

If approved, the plans will add about 1.52 million tons per year of blast furnace capacity and 1.66 million tons per year of EAF capacity

Three Chinese steelmakers from three provinces and autonomous regions of China have officially announced plans to install new steelmaking facilities in 2024. At the same time, old equipment will be dismantled, Mysteel Global reports, citing data from local authorities.

If the plans are approved, Mysteel estimates that about 1.52 million tons per year of blast furnace capacity and 1.66 million tons per year of EAF steel production capacity will be added. At the same time, about 1.82 million tons per year of outdated iron production capacity and 2.33 million tons per year of steel production capacity will be dismantled.

In order to add new capacity, Chinese steelmakers must comply with exchange rules that require shutting down and dismantling old facilities of at least the same capacity, either those already owned by the steelmakers or those they acquired from other steelmakers.

The ratio of old to new capacity for blast furnaces should be at least 1.5:1 in regions sensitive to air pollution (Beijing-Tianjin-Hebei). For electric arc furnaces, it is set at 1:1.

For example, at the end of January, the relevant department of Liaoning Province announced that Jinzhou Jinxing Special Steel Company plans to commission about 360 thousand tons per year of new steelmaking capacity at a 1:1 ratio. At the same time, the company intends to decommission 380 ktpa of old steelmaking capacity, which means it will have an additional 20 ktpa of capacity that it can use in the future or sell to other steel producers.

Jinxing Special Steel, one of the three companies that announced the upgrade of its facilities, can already start implementing its plans as it received approval from local authorities in late February. The projects of the others are subject to public discussion and comments by the end of March.

As GMK Center reported earlier, late last year, the State Council of China published an action plan to improve air quality in the country as part of its efforts to promote quality economic development. In particular, it states the need to accelerate the elimination of old facilities in key industries, including steel. China will continue to encourage the development of steel production in electric arc furnaces to reduce carbon emissions. According to the plan, by 2025, their share should be 15% of the total.