China's industry streamlining faces steel-price test

BEIJING - Tangshan Songting Iron and Steel Co, a steel mill in China's largest steel-producingcity Tangshan, re-opened in April after five months laying idle.

The company, which temporarily shutdown in November over mounting debt, is looking to restartproduction soon, media outlets quoted an unnamed industrial insider as saying.

Similarly, mills in other steel-producing regions, including Tianjin and Shanxi, are resumingoperation, despite a move by the government to downsize the steel sector.

China's steel sector had experienced years of plunging prices and factory shutdowns due to thesluggish economy, however, in March demand picked up thanks to infrastructure and propertyprojects.

Steel product prices have increased more than 60 percent in the year to date. Hot-rolled steelcoils, for example, increased to around 3,200 yuan ($500) per ton from less than 2,000 yuan atthe beginning of the year.

Encouraged by the upward pricing trend, many steel mills are resuming production.

National daily crude steel output amounted 2.28 million tons in March, up 12.9 percent from thefirst two months -- nearing the record 2.31 million tons seen in June 2014. The purchasingmanagers' index that tracks the iron and steel sector increased to 57.3 in April, the first time intwo years that the index has climbed above 50, the level that separates expansion fromcontraction.

China's steel industry has been plagued by overcapacity for years. It has been felt even more inthe past two years as demand for steel has dropped.

Steel producers experienced their worst year in 2015, with combined losses in main businesssoaring 24-fold from 2014 to over 100 billion yuan.

Despite the warming market, however, some are warning that it is too early to celebrate, just yet.There are concerns over whether the construction-driven price spike will impede the governmentplans for the steel sector.

The return of steel companies adds pressure to the streamlining of the sector, thus, policies needto be better implemented, said Ma Li, an analyst with Lange Steel, a steel information website.

Analysts expect the reopened factories will push crude steel output to a new high in April, but thegovernment has vowed to control production. North China's Hebei Province has asked officials tocrack down on new mill projects and close those that failed to secure re-opening approval.

On the other hand, some are downplaying the impact from surging steel prices, describing therebound as "no more than a blip."

The rapid price spikes are not sustainable as they are largely driven by a seasonal pick-up infixed-asset investment and exacerbated by speculation in the steel futures market, according toFitch Ratings.

The rating agency expects steel prices will be under significant pressure in the near term asdomestic demand for steel has generally remained flat.

Vice president of China Iron and Steel Industry Association Qu Xiuli, said that although steelproduction is likely to hit new high in April, the rise in supply will help rein in the rampant market.

Some industry insiders argue that consolidation of the sector will be a long process and unlikelyto be disturbed by short-term changes.

"It is like a 'protracted war' we cannot win in single combat," said Zou Jixin, vice president ofWuhan Iron and Steel (Group) Co. To cut excess capacity, debt-ridden and inefficient steelproducers need to make big changes, Zou said.

Liu Weiming, financial analyst with CITIC Bank, went further and said the price surge may evenhelp steel mills; "The price rebound will improve the solvency of steel companies and give themmore room for restructuring."

Moreover, price hikes are unlikely to change policymakers' resolve.

China's financial regulators in late April ordered banks to stop issuing loans to steel and coalenterprises that operate at a loss.

The Ministry of Commerce said last week that it will work with more nations to address steelovercapacity.

The government shut down outdated facilities with total production capacity of over 90 milliontons in the past five years, and it plans to slash another 100 million to 150 million tons by 2020.

(from chinadaily)

Rolling mill for steel plant

The discovery of the rolling mill in Europe maybe attributed to Leonardo da Vinci in his drawings. The earliest rolling mills in crude form but the same basic principles were found in Middle East and South Asia as early as 600 BCE. Earliest rolling mills were slitting mills, which were introduced from what is now Belgium to England in 1590. These passed flat bars between rolls to form a plate of iron, which was then passed between grooved rolls (slitters) to produce rods of iron. The first experiments at rolling iron for tinplate took place about 1670. In 1697, Major John Hanbury erected a mill at Pontypool to roll 'Pontypool plates'—blackplate. Later this began to be rerolled and tinned to make tinplate. The earlier production of plate iron in Europe had been in forges, not

rolling mills.

The slitting mill was adapted to producing hoops (for barrels) and iron with a half-round or other sections by means that were the subject of two patents of c. 1679.

Some of the earliest literature on rollingmills can be traced back to Christopher Polhem in 1761 in Patriotista Testamente, where he mentions rolling mills for both plate and bar iron. He also explains how rolling mills can save on time and labor because a rolling mill can produce 10 to 20 or more bars at the same time.

A patent was granted to Thomas Blockley of England in 1759 for the polishing and rolling of metals. Another patent was granted in 1766 to Richard Ford of England for the first tandem mill. A tandem mill is one in which the metal is rolled in successive stands; Ford's tandem mill was for hot rolling of wire rods.