China continues world steel dominance by boosting offshore assets

metalbulletin.com General 2018-06-14 09:08:00

Other than its domestic and export prices leading global steel trade, its investments in steel mills around the world let Chinese steelmakers have a physical presence overseas – especially in developing countries where steel demand per capita is expected to continue growing.


The latest Chinese investment is a 2-Mtpa (million tonnes per annum) steel mill in Zimbabwe, Africa, after officials from Zhejiang signed a $1 billion memorandum of understanding (MoU) at the Zimbabwe-China Business Forum this week. It will be headed by a subsidiary of Chinese steel producer Tsingshan Holding Group.  


Major Chinese producer Shaanxi Iron & Steel is planning a 10.5-Mtpa steel operation in Indonesia, including a 7.5-Mtpa steel mill and a Shaanxi Steel Industrial Park, which will produce 3 million tonnes of flat and long steel per year.


Tsingshan Group started operations at its Morowali stainless steel plant in Indonesia in June 2016. It is actively producing hot-rolled (HR) stainless steel at its two plants in Indonesia and is exporting the product mainly to other Asian countries. Tsingshan's Indonesian mills have total capacity for 2 Mtpa.


The company has also formed a joint-venture company in India – Cromo Steels Private Ltd Co (formed with unspecified partners) - to construct a 150-billion-rupee ($2.3 billion) integrated plant with both hot- and cold-rolling lines. The facility will have crude stainless steel capacity of 2 Mtpa, while the CRC capacity will be 600,000 tpa.


Guangxi Shenlong Metallurical Co and Guangxi Beibu Gulf Port International Group Co started up Alliance Steel in the Malaysia-China Kuantan Industrial Park earlier this year, with a total capacity of 3.5 Mtpa of high-speed wire rod, bars and H-beam.


These investments also support China's "One Belt, One Road" initiative, where the world's single largest steel producing country is pledging billions of dollars to build large-scale infrastructure connecting it to 68 countries in Russia, Europe, the Middle East, Africa and Asia. In turn, it expects to boost economic and trade ties with recipients of these infrastructure projects.


And steel mills fit right in the picture by producing the crucial steel building and construction materials to feed the overwhelming number of infrastructure projects.


Major iron ore produce BHP said projects worth at least $1.3 trillion have been initiated, and this could lead to up to 150 million tonnes of incremental steel demand, out of which 80% would be used in structural and reinforced concrete, with the remainder going to produce machinery and equipment.


This would mean an additional 15 Mtpa of steel demand in areas where the One Belt, One Road projects are being constructed. BHP said that power, railways, pipelines and transport projects will account for up 70% of this demand.


The money China is pumping into steel mills around the world will satiate this appetite.


Other than bolstering trade ties with regional economies, China's overseas steel plants also allow it to sidestep anti-dumping or blanket tariffs currently being introduced by major steel-producing countries including China itself, the United States, Europe and Japan.


China is facing a multitude of tariffs globally, including hot-rolled steel piling and steel ropes and cables in Europe, welded pipes in Colombia, cast iron pipes in Brazil, rod in coil in Australian.


However, while anti-dumping and countervailing duties make it costlier for buyers to import China-origin steel, if the product is produced in local plants it does not command any additional tariffs - especially if it is produced in a 'special economic zone' demarcated by the local government as 'tax-free' to facilitate trade, investment and job creation.


(Writing by Alex Guo  Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China Coal Daily Track (Jun 21) 2018-06-21

Thermal coal Domestic market Coal mines in Yulin, Shaanxi province expected another increase in the short run as purchase was active recently from buyers in Hebei, Shandong and Shanxi. Imp

2 China's top 3 provinces contribute 68% of raw coal output in Jan-May 2018-06-21

Northern China's Inner Mongolia, Shanxi and Shaanxi produced 67.94% of the country's total raw coal in the first five months, showed data from the National Bureau of Statistics (NBS). NBS

3 CMPort concludes trade of 50% stake in Newcastle port 2018-06-21

China Merchants Port Holdings(CMPort) has taken over 50% stake in the Newcastle port at AU$607.5 million ($457.5 million) from its parent China Merchants Group on June 14, the company announced on its

4 Chinese central SOEs' profit growth accelerates in Jan-May 2018-06-21

Profit growth of China's central state-owned enterprises (SOEs) picked up pace over January-May period this year, thanks to the deepened enterprise reform and resolve in initiative and sustainable dev

5 Hubei power plants receive 3.6 Mt coal in May, up 12% MoM 2018-06-21

Central China's Hubei province saw its unified dispatch power plants receive a total of 3.62 million tonnes of coal in May from local mines and other provinces, showed data from its provincial economi

6 Sentiment fluctuation pares thermal coal trades at China's N ports 2018-06-21

China's domestic thermal coal market saw bearish and bullish sentiments both growing in recent days, rendering traders unable to judge the market trend but stay on the sidelines. Spot pri

7 S. Korea May met. coal imports down 14.2% YoY 2018-06-21

South Korea imported 2.35 million tonnes of metallurgical coal (including coking coal and PCI coal) in May, dropping 14.18% year on year and down 13.9% from the preceding month, according to the lates

8 S. Korea May thermal coal imports decrease 20% MoM 2018-06-21

South Korea's thermal coal imports (including bituminous and sub-bituminous coal) reached 8.24 million tonnes in May, down 20.61% from a month ago yet up 4.89% year on year, the latest South Korea

9 China's rail cargo shipment hits new high in May 2018-06-21

China shipped a total 338.84 million tonnes of cargoes via railways in May, rising 11.8% from the year prior, hitting a new high since this year, said China Railway Corporation on June 20.

10 Chinese govt relaxes coal import curbs to prepare for summer high demand 2018-06-21

The Chinese government has reduced restrictions on coal imports at some southern and eastern ports on concerns about higher prices and regional power shortages, as demand for electricity jumps during

Most Read Articles

1 China's major coal miners vow to ensure supply and stabilize prices 2018-06-12

While CHN Energy announced late last week to lower their June contract coal price within the "yellow range" below 600 yuan/t, more major miners have promised to lower prices to ensure adequate supply

2 Major Chinese miners work to stabilize thermal coal prices 2018-06-11

Some leading miners in China made price adjustments in response to government's call for stabilizing thermal coal price and supply, sources said. China Energy Investment Cor

3 China to launch broader environmental inspections this month 2018-06-11

China will expand environmental inspections to more cities and regions in a new round of checks from this month to April next year, the Ministry of Ecology and Environment (MEE) said in a statement on

4 China's raw coal output rises to a new high in May 2018-06-14

China's raw coal production registered a new high in May since this year, according to official data, as miners churned out the material driven mainly by tempting profit and rallying prices.

5 China's steel mills utilisation rate falls for 3rd week on environmental checks 2018-06-12

Utilisation rate at steel blast furnaces across China fell for a third consecutive week last week as of June 8, data showed, as environmental inspections continued to weigh on operation at steel mills

6 China proceeds development of coal-to-oil conversion 2018-06-15

China is developing new energy sources by converting coal into diesel. The world's first coal to diesel conversion production line, in China's Inner Mongolia autonomous region, produced 8

7 Weekly China coal market news summary (Jun 11 – Jun 15) 2018-06-15

China to launch broader environmental inspections this month China will expand environmental inspections to more cities and regions in a new round of checks from this month to April next yea

8 CHN Energy reduces contract coal prices within 600 yuan/t, sources 2018-06-11

China Energy Investment Group, also known as CHN Energy, announced to control its monthly contract prices of thermal coal, media reported late June 8, in a way to cool down the overheated coal market.

9 China's 20 large steel makers launch maintenance to improve environment 2018-06-14

A total 20 Chinese large steel makers have launched maintenances since June 11, said the Ministry of Ecology and Environment days earlier, in a move to strengthen environmental inspections at key poll

10 China plans to create a $78 bln natural gas giant 2018-06-15

Together with its massive push to have more and more residential and industrial customers switch from coal to gas, China is aiming to overhaul the ownership of its huge gas pipeline network.