Another Chinese producer to avoid steel capacities cuts under replacement plan

Friday, 09 August 2019 12:13:28 (GMT+3)   |   Shanghai

The Department of Industry and Information Technology of China’s Sichuan Province has issued the capacity replacement details relating to two new blast furnaces, two new converters and one electric arc furnace, belonging to Sichuan-based Dazhou Iron and Steel. According to the plan, the steelmaker will install 2.63 million mt of iron-smelting capacity and 2.69 million mt of steelmaking capacity. The new equipment will be put into operation by the end of 2025.

Though the government has asked mills to reduce steelmaking capacities under capacity replacement plans, there are more relaxed rules for companies shifting more of their capacity to EAF-based production. Accordingly, Dazhou Iron and Steel will eliminate just 2.7 million mt of old capacity, and so in fact its capacities will not change much. At the same time, the producer will eliminate 2.09 million mt of iron-smelting capacity and purchase 0.549 million mt of iron-smelting capacity which had been eliminated by another mill.     

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