The most popular Luojing plant of Baosteel stopped

2022-07-31
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Baosteel Luojing plant stopped production and lost tens of billions of investment.

Baosteel Luojing plant stopped production and lost tens of billions of investment. Baosteel Luojing plant, located in Baoshan District, Shanghai, has lost its due noise. On September 20, the investor saw around Luojing plant that an old man occasionally fished in the river next to Baosteel Luojing plant. Two landmark projects in Luojing plant

in Shanghai in early autumn, the weather is still a little hot. Baosteel Luojing plant, located in Baoshan District, Shanghai, has lost its due noise

on September 20, the investor saw around Luojing factory that there were old people fishing in the river next to Luojing factory of Baosteel occasionally. COREX smelting reduction furnace, the two landmark projects in Luojing plant, is quietly stuck in place. At the beginning of design, its annual capacity reached 3million tons

there are still many workers in and out of gate 2 of Luojing factory. The workers told the investor that Luojing factory had been shut down on September 10. Now, except for some people doing follow-up work, many people have nothing to do, but they still have to report to the factory every day. Before long, the workers either bought out in advance, or stayed to see the factory, or were assigned to Baosteel General Factory

the Luojing plant was relocated from Pudong, Shanghai in order to cooperate with the Shanghai WorldExpo. The relevant assets of the Luojing project occupy a total of 3.228 million square meters of land. According to public information, Baosteel Co., Ltd. () acquired the assets and businesses related to the Luojing project of Shanghai Pudong Iron and Steel Co., Ltd. belonging to Baosteel Group on April 1, 2008, with a delivery price of 14.34 billion yuan. The price is paid interest free for five years, 20% of which is paid every year. From 2009 to december31,2012, all payments have been made

according to the agreement, the balance of the acquisition has not been paid yet, but the plant has been shut down. The investor daily interviewed Baosteel about the reasons for the shutdown of Luojing plant and the future trend. However, Ms. Tao, Secretary of the Board Office of Baosteel, refused the interview on the grounds that it was inconvenient for the leaders to accept the interview

however, a worker at Baosteel Luojing plant told the investor that people in the plant said that the furnace would lose 100 million yuan a month, and the more production, the more losses, so they chose to shut it down. And there is almost no possibility of reopening. Now one has been demolished to the Bayi Iron and steel plant in Xinjiang

a leader of Shanghai Economic and Information Technology Commission who is familiar with the inside story told investor daily that COREX smelting reduction furnace is still in the stage of commercial scale, which is risky. Just like the real estate policy, it was still encouraged in 2008 and will be restricted in 2010. The changes in the situation of the steel industry are also unpredictable. As for where to move, it is difficult to make decisions, and a lot of work needs to be balanced

Luojing plant started less than five years ago

"COREX melting furnace project is the symbol of Luojing plant." The above Luojing factory workers said. The No. 1 COREX project was put into operation at the end of 2007, with an annual iron making capacity of 1.5 million tons. The No. 2 COREX project began construction in 2008 and was put into operation only in the first half of last year. "No. 1 boiler was shut down in July last year, and No. 2 boiler was shut down on September 10." He said

based on this calculation, No. 1 boiler was stopped after less than 4 years of operation, while No. 2 boiler was only operated for more than one year, and its investment and construction took three years since 2008. Even from the acquisition of the project by Baosteel in april2008, it has not been more than five years in total, and Luojing plant has completely stopped production

when Baosteel purchased the Luojing project at that time, it said that the Luojing project adopted the world's innovative smelting reduction ironmaking process (COREX), which has a short production process, greatly reduced environmental pollution and saved resources, representing the development direction of ironmaking process

at present, except for the Luojing project of Baosteel, there are four COREX units used for industrial production in the world, with a molten iron output of about 3million tons. Luojing project adopts the world's first COREX C3000 furnace, with an annual output of 1.5 million tons of molten iron. It is also the world's largest smelting reduction unit. In addition, its steel-making, continuous casting and rolling mills adopt advanced smelting and control technologies, which provides a strong guarantee for the production of high-quality wide and thick plates

the above workers said that it was a "face project" and that the leaders were "patting their heads". As the raw fuel, equipment and other conditions required by this technology are relatively harsh and the technology is not mature, the production cost is relatively high

Lan Jie, an analyst at industrial securities, also said that the project of Luojing plant has a high cost. The furnace is a cutting-edge technology and tracks advanced technology, but it has not been scaled up. I felt good when I introduced it, but localization is still difficult and the requirements for raw materials are high

in addition to the obvious overcapacity in the steel industry in recent years, prices and demand have decreased simultaneously. According to a survey conducted by investor daily on Shanghai dabeshu steel trade market, Mr. Zhou, the boss of a steel trade company, the price of steel has dropped from the highest of more than 6000 yuan per ton in 2008 to the current 3400 yuan. Although it has recovered from the lowest of 3200 yuan in previous weeks, it is still far lower than 4300 yuan at the end of last year. At present, the sales price is still lower than the cost price. The quality of Baosteel's products is better, which is generally about 500 yuan per ton more expensive than other products. Therefore, among the replaceable products, we do not take the initiative to choose Baosteel's products

The overall situation of the iron and steel industry is not good, and it is more difficult for Luojing project to make a profit

on April 1st, 2008, Baosteel Co., Ltd. purchased the assets and businesses related to the Luojing project of Shanghai Pudong Iron and Steel Co., Ltd., which belongs to Baosteel Group. The method of delivery and exclusion: the cut price for filling the oil tank of the experimental machine is RMB 14.34 billion. After the purchase, the project has suffered losses for consecutive years

Pugang is located in Zhoujiadu District, Pudong, Shanghai. The land occupied by the plant is within the scope of the land for the Shanghai WorldExpo. Baosteel Group has decided to relocate Pugang to Luojing District, Baoshan, and re plan and construct it according to the overall urban planning of Shanghai and the needs of the small number of users. In this relocation, Pugang company optimized the product structure and updated and upgraded the process equipment. The leading products are special medium and thick plates and ship plates with high technology content and high added value, which are in short supply in the market

the relocation Luojing project of Pugang was officially started in june2005. On november8,2007, the smelting system of Luojing project was officially put into operation. According to the prediction at that time, the Luojing project will have a certain loss in the year when it is put into operation. With the project gradually reaching its production capacity, it is expected that the benefits will be significantly improved by 2010

however, the actual operating situation has been a loss for consecutive years. From April to December 2008, the accumulated loss of the project was 240million yuan; In 2009, the loss increased to 998million yuan; Since 2010, Baosteel has not separately disclosed the profitability of the project in its annual report. However, the gross profit margin of the wide and thick plates produced by the project was -4.7% in 2010 and continued to decline to -8.9% in 2011

in 2008, the gross profit margin of wide and heavy plate was as high as 28.86%, which was the highest among all products of Baosteel. In 2011, its gross profit margin was almost the lowest among all products

it is puzzling that after the No. 1 COREX project has been put into operation, the No. 2 COREX project started construction in 2008, when the gross profit margin of the wide and heavy plate was the highest, and went into operation in 2011, when the gross profit margin was the lowest, with a lot of investment

the new method obviously needs to first produce a C-shaped frame through other processes. According to the public data, on April 1, 2008, Baosteel Co., Ltd. established the medium and heavy plate branch after acquiring the Luojing project. The COREX ironmaking project of the Luojing phase II project of the medium and heavy plate branch was commenced on April 20, 2008

in the annual report released by Baosteel, Baosteel expects to invest 16.6 billion yuan in fixed assets in 2009, mainly for the construction of a number of follow-up projects such as the Luojing second step project of the medium and heavy plate branch, the relocation of Lubao steel pipe and the product structure adjustment project; In 2010, the budget allocated a fixed asset investment of 19.55 billion yuan, which is mainly used for the construction of a number of follow-up and new projects such as the follow-up project of oriented silicon steel, the Luojing second step project of medium and heavy plate branch, the relocation of Lubao steel pipe and the product structure adjustment project; In 2011, the company budgeted to invest 16.8 billion yuan in fixed assets, which was mainly used to build a number of continuation and new projects, such as the follow-up project of oriented silicon steel, the upgrading and technical transformation project of product structure and process equipment of Meishan Iron and Steel Co., Ltd., the second step project of Luojing, the relocation of Lubao steel pipe and the product structure adjustment project, and invested some funds for technical transformation projects

in recent years, Baosteel has taken Luojing second stage project as a key investment project. Luojing second stage project was completed and put into operation at the end of March, 2011. It was put into operation in April, but stopped production on September 10, 2012. It has invested a huge amount of money in construction for three years, and its operation has been stopped for less than one and a half years

many shareholders have expressed their dissatisfaction with the Luojing COREX project. They believe that Baosteel has been "robbed" by the group company of more than 20billion yuan in the Luojing COREX project alone, thanks to the 14.3 billion yuan of the Luojing COREX project and the losses for five consecutive years, which are all the money of minority shareholders. The project ended in moving to Xinjiang. No matter what form it was transferred to Bayi Iron and steel or moved to Zhanjiang, the quality of vacuum heat insulation board also lags behind that of foreign countries, which means that Baosteel's investment of more than 10 billion yuan may have been lost

shutdown and Baosteel Shanghai production reduction

while the Luojing project was shut down, in March this year, the bidding for its relocation project has begun. According to the bidding announcement, the Luojing project will be moved to the Bayi precision forging die steel plant of Baosteel Group in Xinjiang, and the completion time is october1,2013

Zhaoxia, chairman and Secretary of the Party committee of Baosteel Group Xinjiang Bayi Die Steel Co., Ltd., disclosed in a media interview that the crude steel production capacity of Bayi Iron and Steel Co., Ltd. will increase from 7million tons to 10million tons, and the new production capacity will adopt COREX process

on the morning of July 30, the civil construction commencement ceremony was held for the overall relocation of Luojing No. 1 COREX furnace of Baosteel Co., Ltd. undertaken by China 17th Metallurgical Group to Xinjiang No. 8 iron and Steel Co., Ltd

at the same time, the Shanghai municipal government and Baosteel Group signed an agreement in Shanghai on promoting the restructuring of Baoshan Iron and steel industry in Shanghai. From the perspective of being conducive to the national steel industry development strategy, Shanghai's transformation and development, and Baosteel's enhancement of industrial competitiveness, Baoshan will implement the steel industry structure adjustment in Shanghai Baoshan region from 2012 to 2017. It is expected that after the completion of the adjustment task, Shanghai will reduce the total iron production capacity by about 5.8 million tons, the steel production capacity by about 6.6 million tons, and correspondingly reduce the energy consumption of 3million tons of standard coal. This round of Baosteel's adjustment plan will adjust the enterprises in Shanghai Baoshan Wusong Industrial Zone and Luojing production base. After adjustment, Baosteel will gradually transform itself into a development base for strategic emerging industries - new materials, energy conservation and environmental protection

relevant persons of Baosteel Group also told the investor that the shutdown in Luojing area is to coordinate with the capacity transfer, optimize and adjust the capacity layout, reduce the capacity in Baoshan area, and develop emerging industries in 5-6 years. There is a strategy, and then it will be carried out step by step. It is certainly not backward production capacity, so as to enhance the competitiveness of enterprises. As for this plot, it should also be evaluated. It is certainly beneficial to the future development of Shanghai, the adjustment of industrial structure, and the adjustment of Shanghai's optimal industry and international industrial competition

"COREX project has high requirements for raw materials. For example, it is required to be dry, but the weather conditions in Shanghai are humid, which increases the cost. This may be avoided in Xinjiang

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