In 2019, the task of de-capacity in steel in the 13th Five-Year Plan was basically completed, and the focus of work will shift from national total reduction to structural optimization and adjustment. BHI China Projects Network has sorted out the newly announced steel capacity replacement projects by 40 steel enterprises in 12 provinces from January to August this year. Overall: new steel capacity replacement projects are concentrated in major steel production provinces; Hebei plans to build new steel production capacity accounts for about 1/3 of the country; production capacity has a regional transfer from north to south, which will restore China's steel supply and demand pattern to a certain extent; capacity replacement promotes and accelerates the upgrading of technical equipment in the steel industry.
1. Current status of steel capacity replacement development
1. The task of decapacity is basically completed, and steel output continues to rise. In the context of the country's vigorous promotion of supply-side structural reform, unswervingly resolving excess steel capacity, and
Repeat the strict ban on new capacity, capacity replacement is an important means to achieve the organic combination of prohibited new capacity and structural adjustment, and it has a significant role in resolving excess steel capacity, adjusting industrial layout, promoting mergers and reorganizations, and accelerating the upgrading of steel technology equipment. In January 2019, a spokesperson for the National Development and Reform Commission said that the main goals and tasks of decapacitation of the steel industry in the 13th Five-Year Plan have been basically completed.
With the relaxation of environmental protection production restrictions, in 2019, driven by high demand and high profits, under the conditions permitted by policies, the steel industry promoted the continuous increase in capacity utilization rate and steel output continued to rise through technology and other means. From January to August 2019, the national pig iron production was 544.71 million tons, a year-on-year increase of 6.9%; the national crude steel production was 664.87 million tons, a year-on-year increase of 9.1%; the national steel production was 803.67 million tons, a year-on-year increase of 11.0%.
Chart 1: 2010-2019 National steel production and growth rate
Data source: National Bureau of Statistics
2. The focus of work will shift from national total reduction to structural optimization and adjustment
On May 9, 2019, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other three departments jointly issued the "Key Points for Steel Resolving Overcapacity in 2019", which listed 20 key points for steel resolving overcapacity in 2019, including resolutely dealing with "zombie enterprises" and withdrawing backward production capacity in accordance with the law and regulations. In 2019, we will strive to fully complete the task of reducing the target of resolving excess capacity, and shift the focus from reducing the total national volume to adjusting structural optimization. Reducing the total amount of steel in environmentally sensitive areas such as Beijing, Tianjin and Hebei has been put on the agenda. By 2020, Hebei and Tianjin will control the crude steel production capacity in the region to within 200 million tons and about 15 million tons respectively. 2. Clarify and analyze the new steel capacity replacement projects
BHI Projects in China plan to be under construction to sort out the new capacity replacement plans announced by the national steel industry from January to August 2019 as follows—
1. New capacity replacement projects are concentrated in major steel production provinces
From January to August 2019, a total of 40 steel enterprises in 12 provinces (cities and districts) across the country announced the capacity replacement plans. (Note: There are 1 plan that was cancelled after the announcement, which is not within the statistical scope of this article)
Among these newly announced production capacity replacement projects, more than 80% are concentrated in North China and East China, especially in major steel industry production provinces such as Hebei and Jiangsu. Among them, Hebei Province has the largest number of newly announced capacity replacement projects, with a total of 13 projects, more than twice that of the second place in Jiangsu Province (6).
Chart 2: The number of new steel capacity replacement projects added from January to August 2019
2. Hebei plans to build new steel capacity accounts for about one-third of the country
From January to August 2019, in the national public announcement of steel capacity replacement plan, 116.26 million tons of steel capacity is planned, of which 57.79 million tons of new steel production capacity is planned and 58.47 million tons of new iron production capacity is planned; 63.42 million tons of steel production capacity is planned and 67.01 million tons of iron production capacity is planned.
Figure 3: Distribution of the percentage of new steel production capacity in each province from January to August 2019
Hebei Province plans to build new steel production capacity and iron production capacity, both accounting for more than one-third of the total. Among them, the newly built steelmaking capacity is 20.31 million tons, the ironmaking capacity is 21.77 million tons, 13 new converted
furnaces, 3 electric furnaces, and 15 new blast furnaces.The new capacity of each province plans to build is shown in the chart 4:
3. Regional transfer of production capacity from north to south
Since 2019, among the new steel capacity replacement projects, the projects that transfer across provinces are mainly undertaken in Sichuan, Chongqing, Fujian and other regions. The development of my country's industrial production and steel industry both started in the north. However, under the influence of various factors such as natural endowment, location conditions, regional economic development and policy guidance, the industrial pattern of mismatch between supply and demand in the north and south regions of my country has become increasingly prominent. In the industrial context of promoting and implementing capacity replacement, the migration of production capacity from north to south in the future will be the general trend.
4. Promote and accelerate the upgrading of technical equipment in the steel industry
In recent years, the replacement of steel production capacity has played a significant role in promoting and accelerating the upgrading of technical equipment in the steel industry.
According to incomplete statistics from BHI, in the capacity replacement project announced from January to August 2019, the capacity volume of the planned new blast furnace ranges from 1080 cubic meters to 2770 cubic meters. Among them, most of the blast furnaces with a scale of 1,200 cubic meters were newly built. Among the eliminated blast furnaces, the volume ranges from 420 cubic meters to 2,000 cubic meters, of which 70% are below 1,000 cubic meters. The 100-ton converter is the most planned to be built, followed by the 120-ton converter. The volume of the phased converter is less than 100 tons (excluding 100 tons).
The capacity of the planned new electric furnace ranges from 55 tons to 120 tons. The capacity of the phase-out electric furnace ranges from 40 to 90 tonnes.
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