EAF Route Accounts for Barely 10% of China's Total Steelmaking

SEATTLE (Scrap Monster): The world’s largest steelmaker still depends on blast furnaces and convertors for majority of its steelmaking. The electric arc furnace (EAF) production accounts for only around 10% of the country’s total steelmaking. This is significantly lower when compared with the global average of nearly 25%.

Speaking at the second China EAF Steelmaking Scientific Development Forum, Xu Wenli, director of the Iron & Steel department of China’s Ministry of Industry and Information Technology highlighted the need to create better conditions for EAF steel development in the country.

According to Wenli, China produced around 90 million tonnes of steel through EAF route during the entire year 2018. The EAFs consumed around 60mt of scrap during the previous year. The Ministry hopes to introduce policies in support of EAF steel production. The primary obstacle in EAF steelmaking is the high cost factor, he noted. Incidentally, the cost of steel produced through EAF route is higher from that produced from blast furnaces by nearly CNY 400-500 per tonne.

The higher cost is attributed to two factors. First is the high price of scrap which goes as the raw material for EAF steelmaking. The current high scrap prices makes EAFs less competitive. The second factor is the escalated electricity costs. As per estimates, raw material price and electricity costs together account for almost 90% of the total steelmaking cost.