Jiangxi Province-based Chinese steelmaker Xinyu Iron & Steel Co. (Xinyu Steel), which was acquired by China Baowu Group in 2022, will install two new blast furnaces (BFs) to replace its four existing BFs, as announced by the Department of Industry and Information Technology of Jiangxi Province on March 13.
Xinyu Steel is the province’s largest steel producer, located in southeast China, and produced 10.14 million mt of crude steel in 2021.
According to the statement issued by Jiangxi Province, Xinyu Steel plans to begin constructing two 2,610 cubic meters BFs, with a combined annual crude steel capacity of around 4.364 million mt, due to be commissioned by December 2025.
China implements a “capacity swap” strategy, aiming to control newly-added steel capacity. Accordingly, Xinyu Steel will scrap four existing BFs, which have an annual crude steel capacity of 4.8 million mt, before the new project comes into operation.
In April 2022, Capital Operation Holding Group Co., Ltd., a state-owned company under the Jiangxi government and 100 percent owner of Xinyu Steel, inked an agreement with China Baowu Group, agreeing to transfer 51 percent of its equity in Xinyu Steel without charge. Later in November 2022, Baowu Group officially became Xinyu Steel’s controlling shareholder after receiving approval from China’s State-owned Assets Supervion and Administration Commission of the State Council (SASAC), as previously reported by SteelOrbis.
Market insiders stated that Baowu Group’s takeover of Xinyu Steel will help the latter company accelerate its transformation and upgrading.