China Steel Maker Baowu May Move Blast Furnaces to Cambodia

[CEOCambodiaNews]

May 23, 2019 / 7:14 AM / Updated 13 hours ago
UPDATE 1-Steely ambition: China's Baowu eyes moving blast furnaces to Cambodia
By Muyu Xu and Shivani Singh

BEIJING, May 23 (Reuters) - China’s top steel maker Baowu Group is studying plans to relocate blast furnaces from remote Xinjiang to Cambodia in a bold example of China’s heavy industry shifting excess capacity overseas, a source familiar with the firm’s plans said.

The move, which would mark Baowu’s first overseas production, shows the lengths Chinese steelmakers are prepared to go to maintain output levels despite Beijing’s drive to cut industrial slack in the mainland.

Baowu is looking at the feasibility of shipping two blast furnaces, with a combined capacity of 3.1 million tonnes, along with two converters to turn iron into steel, to Cambodia in late 2019, a senior Baowu manager involved with the plan told Reuters.

The manager declined to be named as he is not allowed to talk to media. Baowu did not respond to emails seeking comment.
https://uk.reuters.com/article/china-st ... KL4N22Z16V

[frank lee bent]

i wonder what they propose to use for fuel and ore.
imbeciles.

[SternAAlbifrons]

i wonder what they propose to use for fuel and ore.
imbeciles.

Yep, strange.
Economic geography 101.
You gotta be close to raw materials, labor and/or markets to get competitive advantage. None of that applies here.

MAYbe, as I always feared, china is moving it's polluting industries to it's "new territories".

[SternAAlbifrons]

Economic geography of steel making in Cambodia/ At first glance;

- Capital; China.
- Raw materials;
i. Iron ore, from NW Aust - cheap, relatively close.
ii. Coking coal. This would have been the killer - but now Indonesia is exporting coking coal in big numbers for the first time. (see Jakarta Post story below for just one example)
iii. Limestone. Thailand is a big exporter.
- Labour; Skilled, semi-skilled and hard labourers. Could be a problem - but then we know China is prepared to ship labour to Cambodia.
- Markets; Manufacturers. China businesses are increasingly locating their manufacturing operations to cheap labour countries overseas. Garments now - soon cars, refrigerators etc.
- Pollution. Steel making is a big polluter. China is dead serious about cleaning up its act - at home only. The big worry is that they will locate the most deadly industries to places like here.

So the economics might just stack up.

(the killer move that will really boost the chinese industrialisation of Cambodia, is when the heavy rail link finally gets through - from sthn china to the coast here. When. ???
And we are going to get a big industrial/commercial port in any case. Exactly where, ???)

https://www.thejakartapost.com/news/201 ... -coal.html

[SternAAlbifrons]

This company seems to highly capable, and cashed up. (for better or worse)

BEIJING (Reuters) - China’s top steel maker China Baowu Group will launch a 20 million tonne high-class steel production project in a coastal city in eastern China, its listed unit said in a stock exchange filing on Friday.

*** The move comes as the government relocates steel mills to the coast from cities to help reduce the impact of lung-damaging air pollution.

The new project will be located in Yancheng city in the manufacturing heartland of Jiangsu province. Once launched, Baowu will shut one of its plants in Nanjing city, the provincial capital of Jiangsu.
The first stage of the Yancheng project, with annual capacity of 8-10 million tonnes, will start construction from 2019 and is expected to be completed within three years, said Baoshan Iron & Steel Co (Baosteel) in the statement.

It will include ports, coking plants, power utilities, sintering, iron and steelmaking as well as steel-rolling plants.

The company expects the first stage of the project to cost 50 billion yuan ($7.20 billion), which will be paid by its own cash and fund-raising, Baosteel said.

Commodities
December 1, 2018
Reporting by Muyu Xu and Dominique Patton; editing by Louise Heavens
Our Standards:The Thomson Reuters Trust Principles.

[Barang chgout]

The north west, into Loas, holds considerable reserves of medium grade iron ore.
As for power, who owns the hydro?
Labour? Too easy!
Rail from N.W. to port....
Seems quite feasible.

Sent from my SM-G570Y using Tapatalk

[frank lee bent]

You need coking coal to make steel, not hydro power
There is a labor shortage in Cambodia
That is why most of the construction labor comes from PRC and the SEZ's run at low capacity

[IraHayes]

I wonder what makes a company relocate a working plant to another country?
Why go to all that expense. There is something here we may be missing. After all, why not relocate in China?
Could this be a request ( with assistance) from the Party as a way to further colonise Cambodia? Since we know from past experience that the plant will be built by Chinese labour, and use materials from China. The huge numbers of workers involved in building and then running a plant of this size will result in the area around the site becoming another Chinese enclave and, thus, further their plans place large numbers of Chinese citizens in another country.

[frank lee bent]

yes, and move in a lot of heavy cargo with a dual use purpose
further deep water ports for example

[Clutch Cargo]

In addition to the previous stated possible reasons of:

exporting pollution, and

further cementing business relations/ties with KOW,

I'm thinking maybe another possible reason is that setting up in another country and exporting from there may escape future anti chinese buying sentiment and tariffs. aka Chinese investment cloaked in 'Made in Cambodia'?