On March 1, Hubei Province-based Chinese steelmaker Wuhan Iron and Steel (WISCO) stated that it plans to go ahead with the launch of the construction of the Fangchenggang steel base in the southern Chinese province of Guangxi.
At present, the WISCO group has an overall steel output capacity of 40 million mt, with its main production base in the Qingshan district of Wuhan city accounting for 18 million mt of this figure. As national policy restricts the expansion of output capacities, WISCO intends to eliminate backward output capacities at its existing facilities in order to gain official approval for the construction of the Fangchenggang steel base, Accordingly, WISCO will eliminate a total of 5-8 million mt of backward capacities at its facilities in the Qingshan district and at its subsidiary company Liuzhou Iron and Steel.
As stated by WISCO general manager Deng Qilin, WISCO has completed port construction and other preparatory work for the planned Fangchanggang base, but the land in question has now been lying vacant for three years. According to new Chinese government policy, if the project construction does not start in the current year, the land will be confiscated. It is estimated that, if imported iron ore for WISCO is landed at the Fangchenggang steel base, savings of more than RMB 200/mt will be made in freight costs compared to the cost of delivering imported ore to WISCO's Qingshan facilities.