China Steel Industry Expands Electric Furnace Capacity

Some of Chinese steel makers expand electric furnace steel making capacity. The makers add capacity at lower cost than integrated steel plant and with lower carbon dioxide emission under increasing accumulated steel. The new trend could prevail in the industry while integrated steel process represents majority in the industry.

Chinese steel plate maker, Feida Group introduced electric furnace based slab making line with 2 million tonnes of annual production capacity. Chinese government could easily approve the construction compared with blast furnace due to lower environmental burden.

Feida Group’s affiliate launched operation of 220 tonne electric furnace based slab making line in February. The firm will supply slab for plate making affiliate of the group. The group plans full capacity production for the 1.8 billion yuan line in September. The firm will add another electric furnace and hot rolling mill in 2 years.

Chinese accumulated steel volume increased by 76% to 5.1 billion tonnes in 2011 from 2006, according to China Association of Metal Scrap Utilization. The scrap generation increased by 45% to 131.9 million tonnes based on the accumulated steel.

Chinese steel production at electric furnaces is around 10% of total raw steel production, which is lower than the rate in Japan, South Korea, Europe and USA. However, the increasing scrap supply could encourage Chinese steel makers to build electric furnace. One Japanese special maker source in Shanghai sees tool steel making middle and small electric furnaces are increasing the capacity.