Baosteel to Start First Phase of Zhanjiang Project

Baosteel Group of China established company for 10 million tonnes steel project in Zhanjiang, Guangdong. The firm builds integrated steel plant with 5 million tonnes of annual output capacity as the first phase in around 3 years after the firm gets approval from the government. Baosteel Group tries to focus the operation into competitive large scale works in southern China while the firm reshuffles oil and inefficient operations in the area. The firm targets world top class steel maker under the strategy to expand the raw steel output to more than 66 million tonnes by 2015.

Baosteel Group agreed with local government of Zhanjiang for the project in March. Southern China needs efficient major steel supply source to serve automakers and other offshore manufacturers.

Baosteel Group’s president He Wenbo said at press conference with Chinese reporters on Tuesday the company expects to get approval for the project from the government in June. A source said to a reporter of Japan Metal Bulletin the firm already finished the ground work and port construction for the project to start the steel work construction as soon as possible after the approval. The firm tries to build new base to cover Southeastern Asian market.

Baosteel Group acquired Bayi Iron & Steel in Xinjiang Uyghur Autonomous Region, Ningbo Iron & Steel in Zhejiang and Guangdong Iron & Steel in Guangdong in recent years. The firm tries to expand the capacity through new project and acquisition while the firm improves the productivity for better international competitiveness.

Chinese government tries to increase the major 10 steel makers’ raw steel output share in the world top steel making country to more than 60% by 2015 through consolidation compared with current 48%. Under the strategy, Baosteel Group tries to shift the production to new capacity from old facilities for better efficient steel industry in China.