On April 6, China's State Council published a notice concerning further elimination of dated production facilities, entitled ‘Adjustment and Revitalization Plan of Steel Industry.' Accordingly, the State Council requires the elimination in 2010 of blast furnaces with capacities of less than 300 m3 and also of converters or electric furnaces with capacities below 20 mt. Furthermore, by the end of 2011 the State Council seeks the elimination of blast furnaces with capacities below 400 m3 and of converters or electric furnaces with capacities below 30 mt.
There has been varied reaction to the notice issued by the State Council. Taishan Steel chairman Wang Shoudong stated it is not fair to classify furnaces according to capacity. He considers the elimination process should remove furnaces with low efficiency and high pollution, but should not be based simply on capacity. The standard should include efficiency, energy saving and environmental protection factors according to each particular case, he said.
Ma Steel chief executive Gu Jianguo said it is reasonable to eliminate furnaces with capacities under 300 m3 and 400 m3 based on environmental pollution factors, but this is not absolutely fair. He says he supports the elimination of dated furnaces, but not all furnaces with capacities lower than 300 m3 are low-efficiency or high-energy-consumption furnaces.
On the other hand, Angang Steel general manager Zhang Xiaogang said he supports the national policy on capacity elimination. According to him, the major problem with furnaces of capacity less than 300 m3 is low efficiency or high energy consumption, and they barely have any environment protection facilities. To reach the environment pollution index, he said, the State Council has set the standard based on furnace capacity. However, this does not mean all eliminated furnaces should be replaced by large-capacity furnaces in order to improve output.