Production level and quality in Chinese steel industry
We had studied the growth in Chinese Iron & Steel Industry last month, and talked about total production, imports, and consumption figures in our article The incredible growth in Chinese iron & steel industry . We herewith would like to get into the details of Chinese industry in terms of steel production. As we mentioned last month, Chinese steel industry passed 181 million tons of production in 2002, as a result of more than a decade of incredible growth. Total figure for finished steel products turned out to be 192'183'400 mt for 2002. Annual production for some of the items was as follows in 2002:Railway products – 1'852'200 mt Wire rods - 35'623'500 mt Medium and heavy plates - 24'603'100 mt Sheet products - 22'445'000 mt Strip products - 15'051'000 mt Seamless pipes - 6'083'000 mt Welded pipes - 7'011'800 mtTen years ago China used to account for just 11% of worldwide production. Today, Chinese total production accounts for over 20% of worldwide steel production. When we study the breakdown by items, it is clearly seen that the weight of Chinese industry is even bigger in terms of long products. Chinese industry's share in worldwide production is as follows item by item.
Crude steel - 20% Reinforcing bars - 31% Wire rods - 37% Merchant bars - 17% Heavy sections - 19% Hot rolled steel - 14% Cold rolled steel - 15% Coated flat products - 2%Capacity increases in 2003: In 2003, approximately 15.5 million tons of increase in steelmaking is estimated. Almost 13 million tons is expected to come through BOFs (Basic Oxygen Furnace) and another 2.5 million tons through EAFs. On the other hand a total capacity of 5.5 million tons (4.8 million tons through BOFs and 700'000 mt thorough EAFs) is expected to be cut. Continuous casting capacity is estimated to increase by almost 18 million tons this year. Rolling capacity of the plants is expected to increase by almost 26.5 million tons this year. Breakdown of capacity changes will be as follows. Hot strip mills - 15.2 million mt increase Cold rolling - 2.6 million mt increase Galvanizing - 1.8 million mt increase Colour coated - 0.5 million mt decrease Plate mill - 0.3 million mt increase Section and bars - 4.5 million mt increase Wire rod mills - 2.1 million mt increase The growth in Chinese steel industry is leaded mainly by smaller private enterprises compared to state owned enterprises. The ten major steel producers in China had increased their production by 17 million tons in total between 1999 and 2002. On the other hand the other producers in China have recorded a total increase of over 40 million tons during the same period. Today there are 32 companies in China with annual steel production of 5 million tons. That is another incredible number when compared to other leading steel producing countries of the world. Major steel producers of China; i.e. BaoSteel, Anshan, Shougang and Wuhan, account for about 35% of China's total production. On the other hand; Japan's big five account for 75%, largest six in the US account for 50%, POSCO in Korea accounts for 65% alone in their respective total national steel outputs. China's number one; BaoSteel, is only the seventh largest steel producer in the world. Those facts point out to the low centralization and less convergent operations of China's steel industry. Total production figures of major producers in China are estimated as follows for 2002.
BaoSteel Group Corp 19.5 million tons Anshan Iron&Steel Group 10.1 million tons Capital Steel 8.2 million tons Wuhan Iron&Steel Group 7.6 million tons Benxi Iron & Steel 6.2 million tons Maanshan Iron & Steel 5.4 million tons Tangshan Iron and Steel 5.1 million tonsThe equipment in Chinese industry is still reportedly lagging behind the advanced world level. However the new blast furnaces, EAFs, continuous casters, hot strip and cold rolling mills, colour coated lines etc. installed since the late nineties have helped modernise the level of equipment overall.