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Baosteel Group, China's largest steelmaker, began work on a 6 billion yuan (US$750 million) facility yesterday to produce special steel.

 

Xie Wei, general manager of Baosteel's special steel branch, said yesterday that the high-end alloy steel project is part of Baosteel's efforts to build itself into a world-leading research and production base for special steel.

 

The alloy steel project is expected to produce 360,000 tons of steel plates and coils each year when it is completed in May 2009.

 

Xie said these high-intensity steel products are meant for the emerging needs of industries such as aerospace, nuclear power, and oil and gas prospecting.

 

The special steel products will bring in around 8.3 billion yuan (US$1.04 billion) to the group each year.

 

The project, the group's largest-ever investment in special steel, will be the country's only large-scale special steel production line.

 

Jia Liangqun, an analyst at industry portal Mysteel.com, described the project as "forward-looking."

 

"China is now going all out to manufacture large and more technology-intensive equipment, which requires abundant steel with special features," Jia said.

 

A million-kilowatt-capacity nuclear power unit, for instance, requires about 2,110 tons of alloy steel, which includes high-temperature alloy, titanium alloy and special stainless steel.

 

China now has 11 nuclear power stations with a total capacity of 8,700 megawatts.

 

According to a national plan provided in 2004, China will build another 40 nuclear power units by 2020. It is also going to help Pakistan build six 300-megawatt nuclear power stations.

 

Oil and gas prospecting, which usually requires high-intensity steel pipelines and drillers, is also a big consumer of alloy steel.

 

Currently, alloy steel, which is still a fledging product in China, is mainly imported.

 

The alloy steel project also reflects Baosteel's commitment to turning out more value-added steel products as set forth in its scheme for the 11th Five-Year Plan period spanning from 2006 to 2010, Xie said.

 

In the plan, Baosteel aims to achieve a 30 million ton capacity, making it one of the top three steelmakers in the world.

 

Last year, Baosteel turned out 22.73 million tons of steel and reported 167.1 billion yuan (US$20.89 billion) in sales.

 

(China Daily July 26, 2006)