Shanxi Accelerates Steel Mills' Capacity to Integrate with Taigang to Exceed 20 Million Tons

At present, there are more than 200 iron and steel enterprises in Shanxi, 13 of which are over 1 million tons, of which 5 are over 2 million tons, and there are more small iron plants. These enterprises are scattered in more than 60 counties in 7 cities of Shanxi (city, Area). The “Shanxi Metallurgical Industry Adjustment and Revitalization Plan” (hereinafter referred to as “Planning”) proposes that Shanxi Iron and Steel will form the five major iron and steel production bases of Taiyuan, Changzhi, Yuncheng, Linfen, and Lvliang based on large-scale backbone enterprises, focusing on the construction of Taigang’s Luliang Steel Production Base. Construction.
By 2011, the province’s iron and steel enterprises will be reduced from the current 200 to about 50;
It is expected that by 2011, the production scale of TISCO Group will reach 20 million tons or more, and in 2015 it will reach 30 million tons or more, so that Taigang Group's production capacity will increase the steel production capacity of Shanxi Province from the current 25% to more than 67%;
Strictly control the total production capacity, and no longer approve new production capacity. All construction projects must be based on the premise of eliminating backwardness. The province's pig iron and crude steel production capacity is controlled at 45 million tons (including cast iron) and 40 million tons.
According to Shanxi Youth Daily, on the 18th, compared with the establishment of Hebei Iron and Steel Group, the acquisition of Nanjing Steel, Baosteel, Shougang integrated Guisteel, etc., compared to Shanxi Steel's integration action is lagging behind. However, on April 15th, the “Reform and Revitalization Plan for Shanxi Province Metallurgical Industry” (hereinafter referred to as “planning”) passed the 34th executive meeting of the provincial government. At this point, the integration of the Shanxi steel industry can finally start.
The goal of this plan from 2009 to 2011 is that Shanxi Iron and Steel will form the five major iron and steel production bases of Taiyuan, Changzhi, Yuncheng, Linyi, and Lvliang based on large-scale backbone enterprises, and focus on the construction of the Taishan Luliang steel production base. By 2011, the number of steel companies in the province will be reduced from the current 200 to about 50. In the next step, Shanxi wants to set up a “Taiyuan Iron and Steel Corporation.” By then, steel companies will probably only retain 10 companies.
According to industry insiders, “This means that Shanxi steel companies have turned from scattered fingers to strong fists, and Shanxi Steel will therefore have a strong competitive edge.”
Taigang will be unified in Shanxi steel country
Following Shougang’s purchase of Changgang News, Tai Steel’s acquisition of Shanxi’s private-owned Meijin Steel Co. Although the results of the negotiations between TISCO and Meijin Iron & Steel Co., Ltd. are still not in place, it seems to Zhu Fengliang that the purchase of Meijin is the first shot of TISCO's merger and reorganization in the province.
The plan clearly stated that by 2015, the production capacity of Taigang Group will increase the steel production capacity of the province from the current 25% to more than 67%. According to industry sources, to a certain extent, this means that Taigang Group will unify the country's steel industry.
“Therefore, to achieve a capacity of 67% of the province, it also means that Taigang's mergers and reorganizations have more than this one.”
According to sources, because TISCO's equipment level is far ahead of the province and it mainly produces special steels, for Taiyuan Steel, other steel enterprises in the province should basically be eliminated, so before that, TISCO was not willing to merge small enterprise.
However, the sudden financial crisis has caused Taigang to suffer severe impacts. It is an indisputable fact that it is difficult to walk alone with the single-leg stainless steel walk. As a result, Taigang, which required diversified development, also began merger planning.
Earlier, at the mid-year work meeting held by TISCO Group, Chairman Li Xiaobo had told the media that “the crisis has deepened and there will be more opportunities for mergers and reorganizations, which will help us to further strengthen and expand through mergers and acquisitions.”
Hu Yuting, general manager of Taiyuan Iron and Steel Group, also confirmed this point. Hu Yuting said, “The company has carried out a feasibility study and due diligence on the cooperation projects of iron and steel and aluminum and magnesium processing in the province and has formed reorganization intentions with a number of steel production companies.”
On April 16th, the first quarter of the province's economic performance analysis meeting held in the province, TISCO Group reported that the current organization special research to implement the "Steel Capacity Adjustment and Revitalization Plan", and actively promote the merger with the province's iron and steel companies Reorganization. With regard to the steel and aluminum and magnesium non-ferrous metal processing projects in the province, due diligence has been completed.
Taigang Luliang base is the focus
The reporter saw that in the planning of "optimizing the layout and promoting the construction of the base", it was clearly stated that "the construction of Taigang's Luliang Steel Production Base should be promoted."
“One of the reasons is that the urban area has no longer allowed expansion.” Zhu Fengliang said that the construction of the Taizhou Luliang Steel Production Base is due to the fact that there is a good production base, which in fact can also be called the relocation of Taigang. .
It is understood that Taigang plans to establish a project with a capacity of 5 million tons in Luliang.
At the end of Taiyuan Iron and Steel Company, Hu Yuting, general manager of Taiyuan Iron & Steel Group also stated that “Taigang has made breakthroughs in the three major projects in Luliang. Among them, the Yuanjia Village iron ore project has already started construction and has also achieved County coal mine prospecting rights. The company hired the name of the domestic steel industry experts, carried out analysis and argumentation and optimization of the Luliang project, and created conditions for the early construction of the project.
“In addition to their own wishes, the favorable policies should also be the conditions for Taigang to consider mergers with other companies.” Zhu Fengliang analyzed that in the country’s revitalization plan, it is reflected in the support of the basic raw material industry, while the 4 trillion investment plan is based on raw materials. The pull is also very impressive. "This means that in the future, the development of steel materials for ordinary building materials will be hugely beneficial."
For small businesses, due to the small scale and poor extension of the industrial chain, it is difficult to start a circular economy to cope with the financial crisis, and the impact is even greater. It also hopes to rely on large companies to revive.
“As far as the iron and steel enterprises in the Shanxi region are concerned, nearly 1 million tons of companies are all shut down.” Zhu Fengliang said that in the long run, now is a good time for large companies to acquire relatively low-cost products.
Informed sources also revealed that in the near future, TISCO will begin to explore the exact “bottoms” of other steel companies in Shanxi Province through various channels, including the production status, liabilities, and other comprehensive census, with the aim of implementing merger and reorganization in the future. Build the foundation.
New capacity is no longer approved
In the planning, it is more intuitive than “promoting the construction of Taiyuan’s Luliang Steel Production Base”. “Striving to reach 2011, Taigang Group's production scale will reach over 20 million tons, and in 2015 it will reach 30 million tons or more, making Taigang Group's production capacity The province's steel production capacity has increased from the current 25% to more than 67%."
"Shanxi Province Metallurgical Industry Adjustment and Revitalization Plan", such a clear idea seems to have people see, Shanxi's determination to promote mergers and reorganization.
The corresponding one is "Strictly control the total production capacity and no longer approve new production capacity. All construction projects must be based on the premise of eliminating backwardness."
The total amount mentioned here is controlled separately, that is, “the pig iron and steel production capacity in the province is controlled at 45 million tons (including cast iron) and 40 million tons.”
At present, there are still more than 200 iron and steel enterprises in Shanxi, 13 of which are over 1 million tons, of which 5 are over 2 million tons, and there are more small iron plants. These enterprises are scattered in more than 60 counties (cities) in 7 cities of Shanxi. ,Area).
Originally as of 2008, the pig iron production and crude steel production capacity in Shanxi Province were 54 million tons and 40 million tons, respectively. However, due to the low industrial concentration, small scale, backwardness of equipment, short industrial chain, and the impact of the financial crisis, Shanxi Iron and Steel Enterprises last year Provincial pig iron production was 28 million tons and crude steel production was 23.5 million tons. However, even in the good economic situation in 2007, our province only produced 37 million tons of iron.
Therefore, to reverse the current situation, Shanxi's promotion of mergers and reorganizations seems to be a necessary answer.
Improve access threshold
The plan proposes that by 2011, “the main equipment will reach the current domestic advanced level, and through the replacement of outdated production capacity, the volume of iron blast furnaces will be 3,200 cubic meters or more, the coke ovens will be 6 meters or more, the capacity of steelmaking converters will be 200 tons or more, and the electric furnace capacity. More than 100 tons.” In this regard, Zhu Fengliang said, “One of our clear goals is to 'improve the advanced level of the international metallurgical industry'.”
As a participant in the formulation of the plan, Zhu Fengliang admitted frankly that “according to the current level of iron and steel enterprises in our province, it is really difficult to achieve this goal.”
“This is a leap-forward development.” Zhu Fengliang said that although the replacement of equivalent capacity or reduction in the elimination of outdated production capacity has not yet been finalized, it is certain that in this Shanxi steel industry revitalization plan, It is certain that the company will increase the project threshold substantially.
In addition to the improvement of the threshold, it is the increasing intensity of the elimination that has made the iron and steel enterprises even more nervous.
The phase-out of 36 million tons of production capacity is related to the national "iron and steel industry adjustment and revitalization plan" proposed in the "by the end of 2011, to eliminate 400 cubic meters and below ironmaking blast furnace, 30 tons and below converter and electric furnace" goal, the elimination of Shanxi proposed The goal is much bigger.
“Before the end of 2011, in accordance with national requirements, eliminate 20 million tons of outdated ironmaking production capacity and 16 million tons of steelmaking capacity. By the end of 2015, we will eliminate iron blast furnaces below 1,000 cubic meters, converters and furnaces below 50 tons, and expectations. Supporting sintering, continuous casting, rolling system, etc."
According to Zhu Fengliang, regarding the current status of Shanxi's iron and steel enterprises, there are only two blast furnaces with more than 3,000 cubic meters, and only eight or nine more than 1,000 cubic meters.
"The plan is very difficult to implement, and does not say that because of local economic interests, local governments do not want the company to eliminate blast furnaces, steel enterprises is also a problem." In this regard, Shanxi Iron and Steel Taiyuan office head Hou Linping said, In terms of planning elimination standards, efforts are too great. However, if the threshold for new projects is too high, it is difficult for companies to raise sufficient funds to build large projects. Moreover, there is no two or three years for a project to be built and it is impossible to complete it.
However, Zhu Fengliang said that this is justified.
“This is not a good thing. From the state’s steel revitalization plan, we must strictly control the total volume. Therefore, it is impossible to increase the scale, but we can also increase the level of equipment and win by technology.” Zhu Fengliang believes that equipment technology and products should be adopted. Quality to increase market share.
At the same time, Zhu Fengliang said that in terms of intangible assets, “Taiyuan Iron and Steel” in the international community will have a much greater influence than “Shanxi Iron and Steel”. In the next step, Shanxi will establish the Taiyuan Iron and Steel Corporation with the Pacific Steel Group as the core. By then, the steel companies may only Keep 10 homes. Upholding the principle of strengthening the economy, Shanxi will likely become another steel province.

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