Two new electric arc furnace (EAF)-based projects in Yunfu city, South China's Guangdong province, are steadily progressing, with one scheduled to commission by the end of this year, Mysteel Global has learned.
The two new projects - the 8 million tonnes/year Guangdong Jinshenglan Metallurgical Technology Co (Jinshenglan) and the 7.6 million t/y South Donghai Iron & Steel Co (South Donghai) - will both produce high-quality and specialty steel, a Yunfu city government official explained.
"The two projects are progressing smoothly, and the contractors are working round-the-clock in order to deliver the projects as fast as possible," the official told Mysteel Global on Friday.
Construction of the two projects is in response to calls by the central government that steel enterprises switch from blast furnace-based steelmaking to cleaner EAF steelmaking. China aims to increase the proportion of EAF steelmaking to 30% by 2025 from less than 20% at present, as Mysteel Global has reported.
Jinshenglan successfully acquired 2,820 acres of land from the Yunfu government and earthworks including the construction of roads have been completed. The first phase of the project includes a 150-tonne electric arc furnace, a 150-t refining furnace, a continuous billet caster and two high-speed wire rod mills, with a total (Phase One) capacity of 1.2 million t/y, according to the project's environmental impact report released by the Yunfu government on February 21.
The first phase of the project is to be commissioned by the end of this year, according to the official.
The Donghai project, on the other hand, may require more time as its construction commenced later. Its first stage is expected to commission by the second half of 2021, the official said.
Donghai's phase-one includes three 150-t EAFs, affiliated LF/RH refining furnaces, and a 1,780mm hot strip mill, with a total capacity of 4 million t/y, as Mysteel Global reported.
Yunfu city, bordering Southwest China's Guangxi and with links to the Pearl River Delta, is seen as a favorable geographical location for the two new companies to supply their products to the Southwest China region, the Guangzhou-Hongkong-Macao Greater Bay Area, as well as to emerging economies in the ASEAN region, all with great steel consumption potential, according to a Shanghai-based source close to Jinshenglan.
Steel consumption in Guangdong is around 80 million tonnes/year, accounting for 10% of China's total. However, the existing steel producing capacity in the region is only 30 million t/y, Jinshenglan explained in its February report seeking approval to install the new capacity.
Meanwhile, the region has sufficient steel scrap resources for the development of EAF capacities. In 2018, Guangdong's existing steel scrap availability was 40 million tonnes that year, and availability has been increasing over the past few years. Yet steel output by EAF in the province is only around 10 million t/y, Jinshenglan said.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.