Autor: Ing. Zhang Shourong Trabajo de ingreso a la Academia Mexicana de Ingeniería. Fecha: 1997 15 páginas

1. The History of Chinese Steel Industry in the
Past Haif Century and Its Role in the
Development of Chinese Economy
Zhang Shourong
Member, Chinese Academy of Engineering
el
WUHAN CHINA
1997

2. The History of Chinese Steel Inclustry in the Past Haif
Century and Its Role in the Development of Chinese
Economy
Zhang Shourong
Member, Chinese Academy of Engineering
1. Introduction
The history of ferrous metallurgy in China might be traced back to 500 B.C., but
the substantial beginning of steel industry commenced only in the late 19 century. In
1890, the construction of the first state owned iron making plant was started and the
blast fumace was blown in in 1894. Owing to the unstability of political
circumstances and corruption of government, the Chinese steel industry had been
staggering for nearly 60 years. In 1949, when People's Republic of China was
founded, the annual production of steel was only 154000 tons ( see table 1)
Table 1 Iron and steel production in China before the founding of People's Republic
(1895to 1948 in 104 tons )
year steel iron year steel iron year steel iron
1895 0.14 0.56 1913 4.3 26.8 1931 1.5 47.1
1896 1.1 1914 5.6 30.0 1932 2.0 54.8
1897 2.3 1915 4.8 33.7 1933 3.0 60.9
1898 2.2 1916 4.5 37.0 1934 5.0 65.6
1899 2.4 1917 4.3 35.8 1935 25.7 78.7
1900 2.6 1918 5.7 32.9 1936 41.4 81.0
1901 2.9 1919 3.5 40.8 1937 55.6 95.9
1902 1.6 1920 6.8 43.0 1938 58.6 104.8
1903 3.9 1921 7.7 39.9 1939 52.7 112.7
1904 3.9 1922 3.0 40.2 1940 53.4 118.3
1905 3.2 1923 3.0 34.1 1941 57.6 153.1
1906 5.1 1924 3.0 36.1 1942 78.0 178.7
1907 0.8 6.2 1925 3.0 36.4 1943 92.3 130.1
1908 2.3 6.6 1926 3.0 40.7 1944 45.3 127.4
1909 3.9 7.4 1927 3.0 43.7 1945 6.0 19.0
1910 5.0 11.9 1928 3.0 47.7 1946 6.0 14.0
1911 3.9 8.3 1929 2.0 43.6 1947 7.0 14.4
1912 0.3 17.8 1930 1.5 49.8 1948 7.6 14.7
As compared to industrialized nations of the same time, Chinese steel industry
was a fragile, backward and out-of-date industry.

3. II. Development of Chinese Steel Industry after the founding of the Peopie's
Republic
Before 1950s' most iron arid steelworks were distributed in northeast part or
north part of China. The biggest iron and Steel enterprise was Anshan Iron and Steel
Company, the second one was Benxi Iron and Steel Company. But after the surrender
of Japanese Imperialist, most of the advanced facilities were dismantied and taken
away by Soviet Army. Afler the founding of People's Republic of China, the
government endeavored to reStoration of destroyed economy. In 1951, most of
existing biast furnaces, open hearths and rolling milis ( except the facilities taken
away ) were restored to operation. At Anshan, three blast furnaces, one open hearth
steel making piant , one siabbing/blooming mili and several long product rolling mills
were in production. At Benxi, two blast furnaces and electric fui -naces were operating.
In north part of China, Shijingshan, Tianjing and Taiyuan Steel were working. The
restoration of existing steel works resulted in increase of iron and steel production. In
1952, 1.93 mtons of pig iron, 1.35 mtons of crude steel and 1.13 mtons of rolled
finished products were produced and set a record in Chinese steel production.
The founding of Chinese steel industry
Chinese government has given priority to steel industry in the course of
industrialization. Before the launching of the 1 St
Five Year Plan, the govemment had
been considering the construction of three steel production basis, i.e., expansion and
modemization of Anshan Iron and Steel Company, construction of Wuhan Iron and
Steel Company as well as Baotou Iron and Steel Company. In 1957 the annual steel
production reached 535 mtons. New built Wuhan Iron and Steel company and Baotou
Iron and Steel company were commissioned in 1958 and 1959 respectively. For
speeding the pace of industrialization, in 1958 the government decided to build
provincial steel works in half of provinces where construction of steel industry were
feasible. All these mentioned measures laid the foundation of Chinese steel industry.
Zigzag route
In 1959, the campaign entitied " Great Leap Forward " was launched all over
the country. This resulted in overloading on national economy, and an adjustment was
needed for recovery of economy. In 1966, Cultural Revolution spreaded throughout
the country. The disturbance of Cultural Revolution had made the national economy
out of order for more than 10 years. Chinese people had been willing to improving
productivity and their living condition on oñe side, and with cunning political
swindlers had been attempting to usurp the leadership of country on another side, the
political condition was unstable. The result of this unstability was the cause of
fluctuation of iron and steel production lasting for more than 10 years. ( see Fig. 1 )
Transition to rapid growth
The ending of Cultural Revolution paved the way for the development of
Chinese steel industry. In 1980, the 1700 mm rolling milis equipped with advanced
technologies
of 1 970's which were introduced from Federal Germany, Japanese and European
countries were put into operation in Wuhan. Many existing steel enterprises were
modified, expanded and modemized. In 1985. one of the biggest enterprise. Baoshan
2

4. o - o
53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97
vear
Fig. 1 Transition of iron and steel production after the founding of
Peopfe's Republic of China
104t 6000
10000
12000
4000
200()
8000
O
49 51

5. /
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N J
pT
1> 5Yv>
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6. Iron and Steel Complex which was equipped with advanced technologies and an
annual capacity of 6.7 rntons imponed from Japan and Federal Germany, was
completed and put into operation. The steady growth of Chinese economy has been
demanding increasing supply of steel and made room for the rapid growth of Chinese
steel industry.
The annual production of pig iron, crude Steel and finished rolled product from
1949 to 1996 are illustrated in Fig 1
III. Achievements and problems
Since 1980, Chinese steel industry has maintained a trend of rapid growth and
reached an annual crude steel production of 100 mtons in 1996. The achievements of
Chinese steel industry in the past 17 years are as foliows:
China has become one of the biggest steel producer in the world
In 1980, the annual crude steel production was 37.12 mtons. After 3 years, the
annual production increased to 40.02 mtons. 3 years later the annual tonnage carne to
be 52.21 mtons, thereafter the growth rate was approximately 10 mtons in two year,
and reached 100 mtons in 1996, and the share of Chinese steel industry has accounted
for more than 1/8 of world crude steel production. ( see table 2 )
Tahie 7 The hre nf Chin te1 incluçtrv in the world steel nroduction
year
crude steel
production in
China mtons
. .
position of Chinese
steel production
share of Chinese
steel production in
world %
1949 0.158 26 0.1
1957 5.35 9 1.83
1965 12.23 8 2.66
1978 31.78 5 4.42
1980 37.12 5 5.16
1985 46.79 4 6.50
1986 52.21 4 7.31
1989 61.59 4 6.58
1991 71.00 '4 9.67
1992 80.93 4 11.37
1994 92.61 3 12.76
1995 95.36 2 13.02
1996 100.02 1 13.32
The distribution of steel works rationalized
As mentioned aboye, before 1949 steel works in China were located mainly in
northeast and north part of china. After the founding of People's Republic, even
before 1960s', the newly built iron and steel works were located where the supply of
iron ore were available. The uneven location of steel works resulted from uneven
distribution of iron ore deposits was not coincident with the need of regional econorny.
After 1 970s'. the construction of steelworks has mainly depends on the requirernent of
local economy. The changes of the policy on the location of steel works has brought
about rationalization of the distribution of steel works in China. Table 3 shows the
changes of steel production in different regions.

7. Table 3 Share of steel production in different regions
Northern Northeastern Easterrt Mid-southern Southwestern Northwestern Whole country
period 4
x lOt % x lO
4
t % x lo4t % x 104t % x 104t % >< 104t % x 104t %
1949 2.6 16.6 11.4 72.6 0.8 5.1 0.9 5.8 15.7 100.0
19501952 47.6 15.8 221.1 73.5 15.0 5.0 7.1 2.4 9.8 3.3 0.1 0.3 300.7 100.0
19531957 273.9 16.4 1039.8 62.4 174.4 10.5 55.0 3.3 119.9 7.2 4.4 0.3 1667.4 100.0
19581962 817.2 14.6 2813.6 50.3 1050.2 18.8 454.6 8.1 415.3 7.4 37.8 0.7 5588.7 100.0
1963-1965 389.3 13.2 1403.9 47.6 671.3 22.8 319.3 10.8 151.7 5.1 13.5 0.5 2949.0 100.0
1966-1970 1192.1 18.1 2655.0 40.4 1644.1 24.9 755.0 11.5 280.3 4.3 51.1 0.8 6577.6 100.0
1971-1975 2340.5 20.4 3846.0 33.5 2870.4 25.0 1562.9 13.6 700.7 6.1 173.7 1.5 11494.2 100.0
1976-1980 3035.7 20.6 4360.3 29.5 3710.2 25.1 2036.3 13.8 1316.5 8.9 300.5 2.0 14759.5 100.0
1981-1985 4328.6 21.3 5138.7 25.3 5016.5 24.7 3310.0 16.3 2079.8 10.2 419.5 2.1 20293.1 100.0
1986-1990 6439.6 21.8 6561.2 22.2 8078.3 27.3 4947.9 16.7 2279.9 7.7 770.6 2.6 29577.5 100.0
1991-1995 10490.4 24.4 7775.5 18.1 12498.2 29.1 6773.9 15.8 4082.0 9.5 1327.8 3.1 42947.8 100.0

8. As illustrated in table 3, the Steel production of northeastern region had been in
lead of all the regions until the period 1980 to 1985. The rapid growth of Steel
production in other regions, especially the eastern region, has made the distribution of
steel production getting even. The eastern region has taken the leading position
instead of northeastern region. The location of steel works with annual capacity over
1.0 mtons are shown in Fig 2.
Adaptation to the requirement of national economy
Speedy development of the national economy requires increasing supply of steel
products. Table 4 illustrates the changes of apparent consumption of steel products in
conjunction with the gross national production and quaritity of domestic steel
products.
Table 4 Changes of GNP and apparent consumption of steel products
ear
GNP of China
X 108Rmb yuan
Apparent consumption
X 104tons
Domestic produçtion
X 10tons
1980 4770.0 3163 2716
1985 8994.6 5477 3692
1990 18544.7 5361 5153
1991 21665.8 5713 5638
1992 26651.4 7209 6694
1993 34476.7 10621 7707
1994 44918.0 10537 8428
1995 1 57277.0 9784 8980
Since 1990, the development of Chinese steel industry has kept pace with the
growth of national economy.
Achievements in technological progress
Technological progress has played an important role in the course of rapid
growth of Chinese steel industry.
1) Modification of existing steelworks
Before 1980, the policy for the development of Chinese steel industry had been
discussed among the people engaged in steel industry. Based on the condition of
Chinese economy, it was recognized that the development of Chinese steel industry
must rely upon to tap the potential of existing steelworks. Efforts have been made to
modify the existing steel works. For example, in Anshan Iron and Steel Company steel
production was less than 5 mtons before 1980, after modification, its annual capacity
has been reached to 8.08.5 mtons. The similar conditions were carried out in Capital,
Wuhan, Baotou, Penzhihua Ma'anshan, Benxi and Taiyuan Iron and Steel Companies.
Before 1980, the provincial steel works were mostly producing 0.3 to 0.5 mtons of
crude steel, after modification over 10 of the provincial steel works are possessing
annual crude steel capacity higher than 1 mtons. The only newly built steel enterprise
after 1980 was Baoshan Iron and Steel Complex with a designed annual crude steel
capacity of 6.7 mtons. It means that over 80% of the increase in steel production has
5

9. -0-- ivestment
U crude steel
77 78 79 80 81 82 8384 8586 87 8889 90 91 92 93 94 95 96
come from the modification of existing steel works.
Fig 3 illustrates the growth of aimual steel production and the accumulative
investment from 1978 in Steel industry.
10000
104t 9000
8000
7000
6000
5000
4000
3000
108 2000
rmb 1000
O
Fig 3 Steel production and accumulative investment
The accumulative investment until 1977 corresponds to the steel production
capacity of 1980, and the accumulative investment from 1978 to 1993 corresponds to
the annual steel capacity of 1996. The increase of annual capacity from 1980 ( 37.12
mtons ) to 1996 (100.02 mtons ) recorded 62.90 mtons which corresponds to an
accumulative investment 179.641 billion Rmb yuans. If the increase of steel were
accomplished by construction of new steel works like Baoshan Steel ( 6.7 mton
annual capacity with investment of 30 billion Rmb yuans ) , the accumulative
investment should be 281.641 billion Rmb yuans. As compared with the actual
accumulative investment, a saving of 1/3 of the total investment has been realized.
2) Development of new processes based on domestic conditions
Developing new processes for local compouiid iron ores
In Penzhihua Iron Ore Mine, the iron ore contains very high h02 and Vanadium.
Because high Ti02-bearing slag is very viscous at high temperature under reducing
atmosphere, it was recognized that it is difficult to be processed in blast furnace.
Through R&D from 1960s' to 1970s', the high Ti02-bearing ore is now successfully
processed in Penzhihua Iron and Steel Company. The similar R&D was carried out for
fluorine-bearing iron ore in Baotou.
Development of fuel injection into blast fumace
In 1960s' heavy oil was firstly experimented as injectant to blast fumaces. Then
coal tas and coke oven gas were tested. The most important research work was the
6

10. injection of pulverized coal into blast ftirnace.
The coal injection was first experimented in Capital Iron and Steel Company.
Table 5 lists the main parameters of blast fumace performance.
Table 5 Performance parameters of BF No.1 ( 576m 3 ) in 1965
Items
Basic
Period
Experimental Period
30/9-5/10
4/9.-7/9
12-.18110 22-27/10 28/10-1/II
productiont/d 862 1020 1035 1016.4 1002
productivity t/d/m 3 1.495 1.770 1.745 1.765 1.740
coalinj.Ratekg/tiron 116.1 132.8 154.8 175.5
coke rate kg/t iron 549 465 449 442 424
blast volume m
3 /min 951 1186 1158 1163 1140
blast pressure Mpa 0.114 0.136 0.137 0.139 0.141
blast temperature C 1011 996 1000 1010 1026
top temperature C 349 367 373 396 397
i co %
39.2 45.2 47.4 53.7 50.0
H2 % 10.4 13.4 12.1 10.3 12.7
slag volume kg/t iron 565 563 573 1 576 580
flue dust kglt iron 6.7 6.1 1 8.7 1 7.8 7.6
The experiment in Capital Iron and Steel Company might be one of the earliest
commercial experiments of coal injection in the world.
c. Adoption and introduction of advanced technologies
In the early 5Os', techriologies were introduced from former Soviet Union, the
basic designs of Wuhan Iron and Steel Company and Baotou Iron and Steel Company
were accomplished by the Designing Institute of Leningrad. Since 1974, a series of
advanced technologies from industrialized countries were introduced into China. The
most important ones was the introduction of 1700 mm rolling mill system in Wuhan
Iron and Steel Company and the introduction of all facilities for an integrated steel
works in Baoshan. The mastering of the introduced technologies has raised the
technological level of Chinese steel industry as well as the output of production.
Achievements are always accompanied with problems, the problems are as
foliows:
1. The co-existence of facilities of different technological levels
The current situation of facilities for iron making, steel making and rolling is
expressed in Table 6, Table 7, and Table 8.
7

11. Table 6 Situation of facilities for iron making ( by 1995)
Classification according to
inner volume m3
Condition of BFs
______ ____________ updated facilities____________
In which with
No.
inner
volume
m3
Nominal
capacity
1 ü t/annum
No.
Nominal
capacity
104
t/annum
~ 3000 4 15676 1199 4 1 1199
2000-2999 12 28305 1942 9 1484
1000-1999 28 35366 2129
500999 30 19319 1079
100-499 265 51103 3234
50-99 276 16056 752
<50 2613 109572 2316
Total 3228 275397 .12648 13 2683
Table 7 Situation of facilities for steel making ( by 1995 )
In which with updated
Classification according to Designed capacity -- facilities
heat size Tons/heat
No
X 104
t!annum Designed capacity
No. 4
>< 10 t/annum
BOF steel making
~ 300 3 670 3 670
100-299 12 1550 3 240
30-99 41 1785
10-29 103 2153
<10 138 783
Subtotal 297 6946 6 910
EAF Steel making
~ 60 18 307 6 103
30--59 48 533
15-29 73 416
3-14 1599 1637
<3 1643 150
Subtotal 3380 4043 6 103
Openhearth steel making
>500 9 420
100-499 24 778
<100 57 280
Subtotal 90 1475 ---
Total _____ 12464 1013

12. Tsihhr R Sitiintinn nf fri1itie.s fr rn1lin ( hv 1995 )
Classification of rolling milis No.
1
Nominal capacity
In which with updated
technology
X 104 tlannum Nominal capacitv
No.
X 10 tlannum
Section milis 3698 6417 23 628
in which:
heavy section 9 546
medium section 302 1489 1 40
light section 3387 4382 22 588
Wire rid milis 833 2073 15 546
in which:
imported 17 606 15 546
Continuous hot rolling milis 8 1630 2 810
Continuous coid rolhng milis 6 570 5 500
Strip (< 1000 mm ) rolling milIs 1006 891 7 1
in which:
hot rolling 109 560
coid rolling 897 331 7 1
Seamless tube milis 86 376 7 146
weided tube milis 868 995 i 14 1 142
Facilities of different levels are characterized by different level of technologies.
Since 1950s'the policy of developing steel industry had been: make use of initiatives
of both central and local governments; build large, medium-sized and srnall
enterprises with the same priority. A lot of srnall and medium sized steel works were
set up nearly throughout the country. Result of this policy was that increase of output
of steel was rapid, but the technological level varied from updated to 70s' or even to
SOs'.
Irdn ore resources can not meet the demand of Chinese steel industry
China is not rich in iron ore resources. The total arnount of iron ore deposit
corresponds to 5.9 billion tons of rnetallic iron which exists mainly in the form of lean
ore or cornpound ores. The output of Chinese iron ore mines could not meet the
demands of Chinese steel industry. The Chinese steel industry has to rely on two iron
ore resources, both home and abroad. Table 9 shows the iron ore consumption and
imported iron ore since 1980.
Steel products of a few category can not meet the requirement of users
Sorne hinds of steel products can not meet the requirement of users in quantity,
for example, electrical sheet for transformers, generators and motors, plate for ship
building, heavy machinery manufacturing, sheet for can making etc., Sorne kinds of
steel products can not meet the requirernent of users in quality, for example, coid
rolled and surface treated sheet for sedans, seamless tube for deep oil well drilling,
heavy plate for power plant over 200 M watts, shadow mark for TV set, etc..
Material consumption is high and productivity is low
The essential performance data are list in Table 10.
9

13. Table 9 Iron ore consumption of Chinese steel industry
Year
Iron ore consumption
X 104 t
Iron ore imported
X 104 t
Share of imported ore
%
Output Of crude steel
>< 10t
1980 11983.4 725.4 6.1 3712
1981 10752.6 333.6 3.1 3560
1982 11077.2 345.2 3.1 3716
1983 11777.5 438.5 3.7 4002
1984 13491.0 597.0 4.4 4384
1985 14746.4 1011.4 6.9 4679
1986 16145.5 1200.5 7.4 5221
1987 17325.8 1209.8 7.0 5628
1988 17845.6 1075.6 6.0 5943
1989 18426.4 1241.4 6.7 6159
1990 19353.1 1419.1 7.3 6535
1991 20959.5 1903.5 9.1 7100
1992 23493.2 2517.2 10.7 8093
1993 25674.0 3039.0 11.8 8954
1994 29102.0 3734.0 12.8 9261
1995 30307.0 4115.0 13.8 9536
Table 10 Essential performance parameters of key iron and steel enterprises
Year
Parameters
1991 1992 1993 1994 1995 1996
Iron making
productivity, tIm3 Id 1.782 1.772 1.815 1.810 1.790 1.749
cokerate kglt 524 514 510 504 508 495
Fe content of burden % 53.58 54.10 53.75 54.86 54.86 55.01
BOF steel making
productivity, tlt.d 21.82 23.36 24.26 24.78 27.81 25.59
metallic material consumption kglt 1117 1115 1117 1112 1138 1128
tap to tap time min 33 33
lininglife heat 857 973 1081 1053 998 1127
availability % 56.34 57.38 58.61 58.96 59.61 61.64
EAF steel making
productivity tImVA.d 15.93 15.33 15.71 14.43 12.27 13.36
metallic material consumption kglt 1020 1017 1029 1045 1046 1038
electricity consumption kwh/t 590 593 595 602 606 608
tap to tap time hr. mm 3°42 3034
availabilit' % 82.10 82.32 84.34 79.12 68.90 70.87
Continuous casting % 26.5 30.0 33.9 39.5 46.4 53.3
10

14. IV. The role of Chinese steel industry in the development of Chinese economy
Chinese Steel industry has supported the rapid growth of Chinese economy
The Chinese gross national production in 1996 amounted to 6670 billion Rmb
yuans and made 9.7% mercase to 1995.As shown in table 4, it is obvious that the
increase of steel output kept pace with the increase of gross national production.
Chinese steel industry has pushed the progress of other industries
The development of Chinese steel industry has demanded more and better supply
of raw materials, fuel, electricity, energy, machinery, chemical and services from
transportation and communication. The increasing demand of domestic market is
always the booming factor of economy. Chinese steel industry has been and will still
be the promoter of Chinese economy.
Chinese steel industry has created millions ofjobs
Chinese steel industry has created nearly 3 million jobs since 1950. ( see table
11)
Table 11 Changes of number of employees in steel industry
Year
Gross production of steel
industry
X 10 Rmb yuan
Annual output of steel
X 1O t
Average number of
employees
X IO persons
1949 ---
--- 6.17
1957 52.4 535 38.26
1965 106.7 1223 71.48
1970 153.4 1779 1 146.5
1975 193.8 2390 191.74
1980 298.9 3712 228.59
1985 400.3 4679 264.04
1990 621.9 6535 288.48
1995 1815.9 1 9536 315.06
V. The prospect of Chinese steel industry
Chinese steel industry could not be a sun-set industry
China is now in her preliminary stage of industrialization. The set-up of
infrastructure is one of the most complicated and huge system of engineering in the
would, and it will be lasting to 20s'of 21 century. Construction of infrastructure needs
countless amount of steel. China has a huge population, ifthe steel per capita assumed
to be 100 kg, the annual output of steel should be 120 mtons. Among all the
conventional and new materials people used nowadays, steel is the best material and
steel industry is not a sun-set industry.
Chinese steel industry is facing a heavy task of modification and
modernization
As illustrated in table 6 to table 8, most of the existing steel works need
modification and modernization, otherwise Chinese steel industry will not be able to

15. survive in 21 century.
3. Restructuring of Chinese steel industry will be an urgent and inevitable task
in the on-coming century
There are too many p1ait and loo many low efficiency facilities in Chinese steel
industry, and the number of employees is astonishing buge. For the improvement of
competitiveness of Chinese steel industry, restructuring will be an urgent and
inevitable task for Chinese Steel industry.
LT
.
12