China’s crude steel output from EAFs almost reaches 100 million mt in 2018

Friday, 24 May 2019 11:37:56 (GMT+3)   |   Shanghai

Wang Xinjiang, vice president and secretary general of the Chinese Society for Metals, has stated that China’s crude steel output from electric arc furnaces (EAFs) almost reached 100 million mt in 2018, accounting for 10 percent of overall crude steel output in China, with this share far less than the global average of 25.2 percent. In 2017, China’s crude steel output from EAFs totaled 74.49 million mt, accounting for 9.3 percent of the overall crude steel output in China.

Mr. Wang indicated that EAF-based steelmaking has seen rapid development in China in the past two years. He added that in the 2017-2023 period China will build 69 EAFs within the scope of its capacity replacement policy, involving a total production capacity of 53.60 million mt, while eliminating 79 EAFs representing a capacity of 38.07 million mt. Meanwhile, orders received by EAF plant manufacturers have been rising, with supply from manufacturers observed to be tight.

Due to the elimination of low-grade construction steel production and ongoing supply-side reforms, scrap supplies are sufficient and scrap prices have moved down, Mr. Wang indicated. He went on to say that, at the same time, due to the urgent demand for green, low-carbon and sustainable development, the EAF-based steelmaking process with low energy consumption and low emissions has become popular and has recorded rapid growth.

However, he mentioned that electricity prices have resulted in high production costs for the EAF-based steelmaking process in China, with costs RMB 400/mt ($58/mt) higher than for blast furnace/converter-based steelmaking.

According to related research, when the price of scrap is higher than RMB 1,648/mt ($238.8/mt), the cost of EAF-based steelmaking will definitely be higher than the cost of blast furnace/converter-based steelmaking. Mr. Wang Xinjiang said current scrap prices in China are at around RMB 2,300-2,400/mt ($333.3-347.8/mt), which exerts a negative impact on EAF development. He recommended that blast furnaces should not use scrap, that the demand-supply equilibrium for scrap should be improved, and that the trend of scrap prices should be kept stable.

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