China's leading steelmaker Baosteel has just commenced the largest overhaul in its history. During September-November 2008, the factory will accomplish a series of overhauling, reconstruction and capacity expansion works in Shanghai. Apart from the scheduled overhauling works, Baosteel also hopes to make use of this opportunity to reduce its output in the current sluggish steel market.
According to its plans, Baosteel's comprehensive overhauling works mainly involve nine mills and manufacturing departments, the No. 1 blast furnace, six converters, five continuous casters, electric furnaces, pipe casters and rolling devices. The overhaul operation got underway in recent days with the halting of production work at the No. 4 power generator and the No. 3 continuous caster.
The overhaul of Baosteel's No. 1 blast furnace constitutes a major part of the overall operations. The last overhaul of this blast furnace was carried out in April 1996, and since then it has produced a total 69.24 million mt of molten steel. It nearly accounts for double the Chinese yearly output figure of the late 1970s. Currently, the capacity of the No. 1 blast furnace is around 4,063 cubic meters. When the current overhaul and expansion is completed, its capacity will have increased to 4,966 cubic meters - the largest in China. As a result, the blast furnace's yearly output is expected to reach 4.05 million metric tons. In addition, it is important to point out that the key technologies and skills involved in the blast furnace overhaul will be provided locally instead from abroad. It is forecasted that the new No. 1 blast furnace will have an operational lifespan of 18-20 years.
Currently, Baosteel has lowered its ex-factory prices in October and November in order to keep pace with the weak market. However, except for high-end products, Baosteel's sales of HR products, normal CR products, and certain wire rod products are coming under pressure. The related mills are running below their designed production capacities due to insufficient orders. Consequently, coming towards the end of September repair works were started on the 1880 HR production line, though such repairs are not due to last long.