China’s Tangshan Jinma Steel Targets Inner Mongolia to set up its Production base

Tangshan Jinma Steel based in China's top steelmaking province of Hebei is set to invest 12.5 billion yuan to build a steel production base in Chifeng city of Inner Mongolia, according to market sources.

The construction is expected to begin in 2020, with production starting three years later. Designed with an annualised capacity of 3 MnT of quality steel, the project will employ 6,000 people. The company already has a production capacity of 2.4 MnT in Luan Country, Tangshan.

The production base will also replace 1.8 MnT of coke capacity from Chifeng Defeng Coke plant to manufacture methanol and ammonia.

Inner Mongolia has become a favoured destination to set up steel and even graphite electrodes plants by the Chinese players due to the advantage of lower electricity costs.
In order to control rising pollution, China’s Tangshan city is making serious efforts over the past few years and is ordering polluting units to completely shut down and is motivating others steel to shift their base. In early May this year, Tangshan city has set higher iron and steel capacity cuts target for 2019 after the feedback received from the air pollution inspection team.

It has set a target to achieve reduction of steelmaking capacity of 10.06 MnT, ironmaking capacity of 8.04 MnT, coal production capacity of 500,000 tonnes. The official document pointed out that there are 40 steel enterprises in Tangshan, and the production capacity of pig iron and crude steel is 128 MnT and 134 MnT respectively, accounting for 53% and 56% of the Hebei province’s total capacity.

Subsequently, it is imperative for Tangshan City to further compress its capacity and optimize the industry structure. It is confirmed that in order to improve the air quality, Tangshan city, by 2020 will reduce the steel production capacity down to about 100 MnT and steel enterprises will be reduced to less than 30, completing the relocation of steel mills situated in urban areas and those environment vulnerable areas.