China’s Fengnan planning 8mn t/yr flat steel capacity

26 September 2017

Chinese steel producers Tangshan Ruifeng and Donghua Steel are planning to invest over 16bn yuan ($2.4bn) to add 8mn t/yr of new flat steel capacity in the Fengnan district of Tangshan, the country’s largest steel-producing city.

State-controlled Tangshan Ruifeng plans to invest Yn11bn in a 6mn t/yr cold-rolling mill. The project is currently in the land acquisition stage.

Another Yn5bn will be invested by Donghua Steel to build 2.2mn t/yr of hot-rolling capacity, with construction to start later this year.

The investments are part of plans by Fengnan authorities to build a production base for cold-rolled steel products, while at the same time reducing the number of steelmakers in the district to four from 10 through mergers and shutdowns. Fengnan-based mills plan to invest over $6bn in projects to produce higher-value steel products.

Chinese mills have been seeking to diversify into higher-margin flat products used in automobiles and kitchen appliances. But a construction boom in the country since last year has sharply increased prices of long products and significantly cut the typical price premium for flat steel.