Excerpts of an interview with Shen Wenrong, chairman of Shagang group, by China Metallurgy News late last month. Shagang is China’s largest private-sector steel producer:
- Given the fact that China has realized self-reliance for 98% steel supply, efforts should be made on how to transit to becoming a leading player in the global arena. Steel production should cover the full range of medium and high-end steel products.
- Plan strategically on securing raw material supply. China can meet its demand for coal and coke but around 70-80% iron ore is imported, with a large chunk of it from Australia. Around 60% of China’s total iron ore import of 659.55 mn t in the Jan-July’20 period came from Australia. To address the problem, authorities should encourage the development of domestic resources with scientific approach. Meanwhile, industry participants should seek to invest in other mineral-rich countries, such as South Africa and Brazil, to establish new channels of supply. Import of steel scrap and coking coal should be eased. Increased scrap use in steelmaking can replace part of iron ore in the furnace burden. Overseas sources of coking coal are of better quality than domestic ones.
- Well-planned capacity adjustment should avoid unreasonable relocation of steel mills. Steel mills that have struggled to meet environmental requirements in one place should not be given a chance to relocate to other places but shut down once and for all.
- No need to promote EAF as BOF in blast furnace too can consume more scrap. Of the 270 mn t steel scrap produced each year,260 mn t are consumed in the BOF. The BF steelmaking route is RMB 600-700/t lower than that of EAF.
- Those mills that are in compliance with regulations should be encouraged to go for upgradation, optimization of product portfolio, become environment friendly and realize smart manufacturing.
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