China completes “qualitative” growth of ferrous metallurgy

China’s Ministry of Industry and Information Technology (MIIT), the regulator of the country’s industrial sector, including steel mills, is collecting public feedback until January 31 for the final version of “high quality” development guidelines for domestic steel mills. the period of the 14th five-year plan (2021–2025) and an even longer period until 2035, says Mysteel Global.

The 15-page guide lists detailed criteria for all key aspects, including technology upgrades, automation and low carbon emissions in manufacturing, optimizing capacity allocation, and increasing competitiveness for the environmentally friendly and sustainable development of China’s steel sector.

  • Capacity Allocation and Industrial Optimization

Key goals include increasing steel production in electric arc furnaces (EAFs) to more than 15% of the total, or at best 20%, as well as the use of scrap in steelmaking to 30% by 2025.

Over the past few years, EAFs have accounted for about 10% of the country’s total steel production, and scrap steel use accounted for no more than 20% of the country’s total production in both cases.

MIIT proposes to achieve 45% self-sufficiency in iron ore and ferrous scrap by 2025, which is difficult to achieve, although the planned consumption of 300 million tonnes of scrap in five years is reported to be quite realistic.

To support the domestic scrap steel industry, MIIT is proposing to build large scrap yards with a complete production chain, launch sites for spot trading in scrap and scrap futures, and install EAF facilities in industrial parks on the outskirts of Chinese cities with access to rough terrain. -regional networks or coal and power plants nearby.

In addition, China’s top five factories should produce 40% of the country’s total steel, or the first ten 60% of the total, and in terms of productivity, steel production per capita should be 1200 tons per year for the entire industry, or 2000 tons. t /year for new metallurgical plants.

According to Mysteel Global, by 2019, the country’s ten largest steel mills provided 36.6% of the country’s total steel production.

A notable change in tone in the new proposal is that Beijing will no longer approve projects to move steel facilities to coastal areas in principle, but instead encourages steel mills to upgrade existing facilities until they can meet the ultra-low emissions “.

  • Low carbon emissions from steel production

In this aspect, MIIT requires that 80% of steel mills or 100% of steel mills in highly polluting regions have completed “ultra-low emission” rectification by 2025, thus reducing overall waste emissions by 20% and reducing energy consumption. by 5% in general and per unit, water consumption per unit has decreased by more than 10%, and the water reuse rate exceeds 98%.

All of this should help the country reach a peak in carbon emissions before 2030, as the documentation explains. According to Mysteel Global, the steel sector accounts for over 18% of the country’s total carbon emissions.

“These five years are critical for the steel industry or the country’s industrial sector as a whole to reduce carbon emissions, as climate change has become a pressing issue and appropriate measures need to be formulated and implemented to push all related industries in this direction (green)” a senior market analyst from Shanghai commented on the situation.

The document warns that all domestic steel mills that do not meet the standards by the deadline must be suspended until all necessary corrections are completed.

  • Smarter manufacturing and higher efficiency

In five years, Chinese steel mills should step up digitalization and automation of their operations, with 80% of key manufacturing operations being digitalized, 50% of manufacturing capacity to be digitalized, and China to create more than 50 smart steels. companies by 2025.

A second senior analyst from Shanghai admitted that China’s top steel mills are ahead of many of their competitors in this regard.

“Many Chinese steel companies have installed software for operations or trading, but equipment such as robots is just as necessary for maximum efficiency, and only a few factories have invested heavily in it,” he said, adding: more for

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