China's Rizhao Steel increases capacity under reduced swap policy
Rizhao Iron and Steel Holding Group Co Ltd’s total ironmaking capacity has gone up by 7.9325 million tonnes (mn t) while its steelmaking capacity has increased by 9...
Rizhao Iron and Steel Holding Group Co Ltd's total ironmaking capacity has gone up by 7.9325 million tonnes (mn t) while its steelmaking capacity has increased by 9.06 mn t post-its four acquisitions within the Shandong province, under the reduced swap policy.
It acquired the total 5.69 mn t ironmaking capacity and 6.66 mn t steelmaking capacity of the Guangfu Group and Chuanyang Group, and the total ironmaking capacity of 2.2425 mn t and steelmaking capacity of 2.4 mn t from Zibo Qilin Fushan Iron and Steel Co Ltd and Shandong Longsheng Iron and Steel Co Ltd.
Reasons for the acquisitions
These acquisitions will all be used for the reduced swap of three new 3000m3 blast furnaces (with an ironmaking capacity of 7.5 mn t), two 300-tonne converters (with a steelmaking capacity of 6 mn t), and two 120-tonne converters (with a steelmaking capacity of 2.7 mn t) that will be built in Lanshan district and completed in 2022.
Reduced swap indicates, for example, if a mill wants to have one tonne of new capacity, it will need to shut down 1.25 tonnes of old capacity.
These acquisitions are all part of the steel major's efforts to comply with the Chinese government's policy of controlling steel capacity and encouraging advanced technology for clean and energy-efficient production.
According to the list of the top 50 global steel companies and those with an output of crude steel of over 3 mn t in 2020, as announced by the World Steel Association, Rizhao Steel ranked 26th with an annual output of 14.4 mn t of steel. After completion of the new blast furnaces, its production capacity may exceed 23 mn t, moving further up the ranks. The continuous expansion of Rizhao Steel's production capacity may well get reflected in 2022.
Rizhao Steel Holding Group Co Ltd acquired Minmetals Yingkou Medium Plate Co Ltd although the deal is still pending. After the transaction is completed, Rizhao Steel will hold 100% equity of Minmetals Yingkou. The crude steel output of Minmetals Yingkou is about 7 mn t.
Hence, steel output of Rizhao Iron and Steel Group is expected to reach 30 mn t in the future.