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[ferro-alloys.com] Three privately-owned steel mills in eastern China's Shandong province have launched feasibility studies into relocating to a new costal hub in Rizhao, the province's Ministry of Industry and Information Technology said this week.

The move is in line with the Shandong provincial government's ongoing plan to consolidate its local steel industry and relocate steel capacity away from urban to coastal areas.

The shift will enable the mills to replace inefficient steelmaking capacity with upgraded facilities, boosting operational efficiency, and relocate closer to ports, streamlining access to imported raw materials, the provincial government said.

According to the ministry, steelmakers Weifang Special Steel Group, Luli Iron & Steel and Juneng Special Steel are in discussions with Rizhao Iron & Steel, which is already located in Rizhao, about relocating their steelmaking facilities. The three mills have a combined pig iron capacity of 6.68 million mt/year and crude steel capacity of 9.01 million mt/year.

All three mills are privately owned. It is not clear what role Rizhao, which is also privately owned, will plan in the three mills' relocation or if they can even be required to consolidate operations.

The Shandong provincial government had earlier announced plans to concentrate the steel capacity that was spread across 12 of its cities into the coastal region of the Qingdao-Rizhao-Linyi area and inland Laiwu-Taian area by 2025.

To date, Shandong Iron & Steel Group has recently put its new 8.72 million mt/year integrated steelworks in Rizhao city into full operation after dismantling its inland subsidiary Jinan Iron & Steel's facilities in 2017.

In addition, a new entity Linyi Iron & Steel Investment Group was recently formed to build an integrated steelworks with 3.4 million mt/year of crude steel capacity in Linyi city, which is predicated on the closures of Jiangxin Iron & Steel and Huada Iron & Steel.

These two capacity relocations will reduce combined crude steel capacity in Shandong province by about 100,000 mt/year.

(S&P Global Platts)

• [Editor:王可]