Operation ground steel has not yet taken over, and discussions have continued for several months on whether the operation will create a supply gap。
According to a report by china's combined steel grid (hereinafter referred to as “chong steel”), a number of companies began to engage in electric arc furnaces before the official request to shut down was made. Given the prolonged shutdown and the duration of the overhaul of the newly debugged arc furnaces, ccn is expected to contract by june 2017, and the may-june 2017 arc furnaces will be replenished, and it is expected that the arc furnaces will be substantially replenished by the medium frequency furnaces。
Ground strip steel is defined as steel or steel produced from scrap steel, melted through induction furnaces, etc., that cannot effectively perform composition and quality control, mainly for construction purposes, and is considered to have serious quality hazards. And the medium-frequency furnace, which was pushed to the tip of the wind, was the type of induction furnace by frequency。
Arc furnace steel, on the other hand, is used to heat and melt furnaces using currents to produce high temperatures between graphite electrodes and metal. The electric arc furnaces are used mainly for the production of special steel and high alloy steel and are now used for the production of ordinary steel. The electric arc furnaces have advantages in terms of simplicity, low investment and greenness of smelting equipment compared to the high furnaces, while the electric arc furnaces are of better quality than medium-frequency furnaces for reasons such as ease of control and ability to regulate their composition。
However, due to the price of electricity and the scarcity of waste steel resources in china, electric arc furnace steel is not the mainstream in china. According to an earlier report by drazen, over the past two decades, china's electric furnace steel has shown an overall downward trend, well below the world average of 29. 3 per cent. China's massive investment in the furnace conversion process has led to a significant increase in conversion steel production, while only a small investment has been made in electric steel, which is growing far behind the conversion steel。
Will the mid-frequency shutdown cause supply problems
This electric arc furnace has given rise to hot talk in the industry, behind which the firm strike of the relevant sector on the ground steel has led to the fate of all medium-frequency furnaces or will end。
In accordance with the directory of guidance for industrial restructuring (2011) (amended), work frequency and medium frequency induction furnaces for ground steel, carbon steel, stainless steel smelting are in the phase-out category. However, in a circular issued in early december 2016 by five departments, such as the national commission for development and development (cnd), on the decisive containment of new production capacity for steel and coal violations to combat “land-coated steel” and on the establishment of an operational order for production (re-run no. 2547), emphasis was placed only on the industrial and medium-frequency furnaces used for the production of land-coated steel。
The findings of the medium-frequency furnace have not yet been clearly identified, but the medium-frequency furnace enterprise is less optimistic. According to previous sources to the news (www. Thepaper. Cn), “the steel in the interior of the industry has hit almost as hard as possible, and most enterprises themselves have chosen to shut down even in provinces where there is no notice of a severe blow”
Qui, senior researcher of the west bank new main line, also said to the news earlier: “it was already at the end of the year, and the medium stoves stopped. Medium-frequency manufacturers are watching and awaiting further decision-making. The mid-frequency furnaces are not being completely dismantled, as there is still a lack of authority to conclude that the medium-frequency furnaces are producing strips of steel.”
With regard to the capacity of medium-frequency furnaces, there is a general perception in the industry that it will be around 100 million tons, while actual output in 2016 will be about 50 million tons. The impact on the market of the total closure of medium-frequency stoves, which are essentially used for the production of building materials, has been mixed。
Mysteel steel analyst xu, in an interview with the press (www. Thepaper. Cn), stated that “in terms of total steel capacity, there is now excess, even if the medium-frequency furnace is completely shut down, long-processed capacity and existing electric arc furnaces can largely fill this gap in the medium-frequency furnace and should not create supply constraints”
At the same time, xu stressed that “if the medium-frequency boiler's capacity is shut down and long-processed steel plants are not in a position to increase production and supply, they may create short-term supply stress. But in the longer term, for example, in a few months, the production of long processes can be increased to compensate for the medium frequency furnace.”
Previously, vice-minister seo lojiang stated to the outside world that “the bad currency has gone, the good currency has come up, and there will be no supply problems”
Electric arc furnace to compensate for risk
It is noteworthy that even when the medium-frequency furnace exits to leave room for the arc furnace, the arc furnace is not easily mounted。
According to one of the country's large steel companies (www. Thepaper. Cn), “an electric arc furnaces also need to be approved, not built. Moreover, they are expensive to make steel, and are largely in loss if they replace medium-frequency steel. That is, even if the arc furnaces are a regulated production capacity, given the current tight control of the new capacity in the steel industry, it is unlikely that the arc furnaces will be able to expand this capacity。
Suh mentioned that “if the medium frequency furnaces are shut down because they belong to a backward production capacity, it is not allowed to be replaced by a new one.” suh believes that, in the context of the current massive loss of capacity, enterprises may be at risk of stepping on the policy red line if they build or modify medium-frequency furnaces because they shut down them. “now, whether they build high furnaces or transform furnaces, electric furnaces, once projects involving steel refining capacity are very sensitive.”
However, the report on central steel refers to another secret. While there are procedures associated with electric arc furnaces, most of the units are produced using medium-frequency furnaces and are out of service. Owing to the impact of the site in the plant area and the high cost of electric arc furnaces, some of the plants with arc furnaces were able to remove the arc furnaces and release them for installation of medium-frequency furnaces. The current shutdown and dismantling of the medium-frequency furnaces and the reloading of the arc furnaces do not preclude new equipment from producing more than its original capacity。
The report also mentioned that, through the manufacturers of the main electric arc furnaces in the country, it was known that the contracts for the orders for the main electric furnaces were now very full。
The author of the chongryon report, liu hai, in an interview with the press (www. Thepaper. Cn), stated that “a number of small steel plants have been licensed to produce with electric arc furnaces and are actually produced with medium-frequency stoves.” the share of such enterprises in medium-frequency furnaces is “no statistics are available and should be high”。
At the same time, liu hai mentioned that “when all the units of production of electric arc furnaces, the medium-frequency furnaces have been removed, the failure to operate the arc furnaces would have resulted in a complete shutdown or the continued use of the medium-frequency furnaces for production was stolen”
According to the aforementioned large steel company, “the switchoff of the medium-frequency furnace to the electric arc furnace continues to occur, but rarely. And it's a big risk to the local leadership
Suh's analysis, “when the medium-frequency furnace steel plant is shut down, there is no steel refining, and the line of production of the rolling material is left idle and there are problems of survival.” however, there is still a clear policy between the shutdown of the medium-frequency furnace and the admission of other arc furnaces. "is it allowed to open arc furnaces? If he can replace it, he'll be fine. If the medium-frequency furnace is illegal, then the construction will be ordered to be dismantled and the investment in the steel plant will drift and face penalties, a policy risk that must be addressed.”
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