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| Inspection Of Panicky Situation In Current Production Of Ferro-Silicon In China (1) |
| = Qinghai Province Is Objective District For Regulations But Already Achieved Its Standard |
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A pressman of The Tex Report Ltd. had an opportunity to visit main bases to produce ferro-alloys in China during the 3 days of the 15th to 17th of September and gathered the realities in China. The four districts in the western part of China (Qinghai Province, Gansu Province, Inner Mongolia Aut. Region and Ningxia Hui Aut. Region) are main bases to produce ferro-silicon in China and have shared approximately 50% of the whole production in China. On this occasion, our pressman visited the three leading producers, comprising of Qinghai Wutong (Group) Industry Co., Ltd. in Qinghai Province, Dragon Northwest Ferroalloy Co., Ltd. in Gansu Province and Erdos Metallurgy Group in Inner Mongolia Aut. Region, and had the meetings with responsible persons of these three producers on the subjects of the regulations for facilities to produce ferro-alloys and its influence on their operations. Consequently, in form of answering to the questions placed by our pressman, he has obtained frank opinions from these persons, in relation to an outlook for the future development of the regulations, the countermeasures for this subject to be adopted by them, and so on. The contents are summarized as follows ; <> Qinghai Wutong (Grou) Industry Co., Ltd. This company is the largest producer of ferro-alloys in Qinghai Province and has possessed the 12 subsidiaries (including 5 plants to produce ferro-alloys), which produce approximately 500,000 tons in total per annum of ferro-alloys. In particular, this company produces 250,000 - 300,000 tons per annum of high purity ferro-silicon as the largest output in China. In addition, the company is scheduled to expand the capacity in next year to produce a further quantity of 100,000 tons. Also, the supply of electric power generated by means of utilizing the remaining heat exhausted from electric furnaces has launched from October of 2009 and maintained a stable and efficient operation up to this moment. Therefore, this high technology has been widely known over the world. Most of the products are sold in domestic market of China and the company exports only ferro-silicon. Japan is the most important market to export their ferro-silicon, and the USA, South Korea, other Asian countries and European countries are the markets for exports of ferro-silicon from this producer. The main businesses at this company are mining (to mine iron ore and to extract copper and zinc as by-products) and electricity generation, and these mines produce 10 million tons in total per annum of various ores. Also, the company has possessed two mines in Tibet, which produce lead ore, zinc ore and manganese ore, and high quality silica to be consumed for production of high purity ferro-silicon is obtainable from mines neighboring to the plant. For a reference, a 85% of electricity generated in Qinghai Province comes from hydroelectric power generation by means of fully utilizing an enough volume of water flowed from the riverhead of Huanghei and the industrial electric power received by these plants has been supplied through national electricity grid. The whole volume of electric power generated by means of utilizing the remaining heat exhausted from electric furnaces as mentioned above has been consumed by this company, which is covering 8 - 10% of the power consumption at plants as a whole. Mr. Wang Qimin, General Manager of Qinghai Wutong (Group) Industry Co., Ltd., replied to the questions placed by our pressman as follows ; (1)Question : How extent do the regulations for facilities to produce ferro-alloys influence on the production in Qinghai Province ? (1)Answer : The volumes of electric power to be supplied to industries have been restricted but the Government of Qinghai Province so far does not instruct the limitation of electric power to be supplied to plants. The situation in the western part of China is as mentioned above but producers in the southern part have already promoted the countermeasures for saving energy and, accordingly, are supposed to be difficult to be specified as the objective enterprises. However, the producers, located in Guangxi Zhuang Aut. Region and Guizhou Province, are still delaying to arrange the countermeasures for saving energy. (2) Question : How do the regulations for facilities as instructed by the authorities concerned influence on the production activities of ferro-alloys in this province ? (2)Answer : The production activities of ferro-alloys are thought to be influenced considerably and this aspect will put a substantial impact on both of domestic market and overseas market. In addition to the situation of ferro-silicon, the supplies of other ferro-alloys are anticipated to continue on a tightness. Consequently, the steel production in China will be influenced so much as never experienced in the past years. (3)Question : How extent does a reduction in production of ferro-alloys cause a cutback of steel production in China ? (3)Answer : I can not presume the true meaning of the regulations as adopted by the Government but, as far as the Government has promised the international community to maintain the standard for exhaust of carbon dioxide, I understand that China has to keep strictly this standard. (4)Question : How does the list as announced on the 8th of August relate with the facilities to scrap down or the districts and producers to be selected ? (4)Answer : The standard to be able to enter into the ferro-alloy industry has been set up and each producer has cleared this standard. In addition, the authorities concerned has watched about an achievement of the standard to save energy in each district. However, even the districts, where have cleared the regulations for facilities to produce ferro-alloys, have become the objective ones to be controlled. (5)Question : Some of steel producers have been instructed to regulate their production and how does this restriction of steel production relate with consumption of steel products ? (5)Answer : This is a matter of the balance but it is still not clear yet at which time this balance will be made up. Under the present situation, a reduction in production of ferro-alloys is supposed to be larger than that in steel production. If this aspect continues for a certain period, an anxiety to develop to a public problem will arise. When this problem comes up to the surface, the circumstances are anticipated to move to make a balance but it will be hardly possible to foresee at when and in where does this movement appear. It will be difficult to produce ferro-silicon with substantial quantities in other countries than China and, on the other hand, a rival of the production in China is thought to depend on the policy to be adopted by the Central Government of China. (6)Question : How extent do the regulations for ferro-alloys influence on the production activities of other ferro-alloys than ferro-silicon in China ? (6)Answer : The regulations for production of ferro-alloys as enforced in this time by the Central Government of China will be inevitable to put a certain influence on the production of other ferro-alloys in China. The orders to be influenced by the regulations are supposed to be firstly silico-manganese and secondarily silicon metal but it is difficult to judge whether this influence expands further to other ferro-alloys or not. (7)Question : How does Qinghai Wutong (Group) Industry cope with the regulations for production of ferro-alloys as enforced in this time ? (7)Answer : The Government of Qinghai Province has already prepared " a preliminary proposition " for the regulations and submitted this paper to the Central Government of China. The contents of this proposition have consisted of the three stages of (1) the production of ferro-alloys will be in principle suspended as a whole, (2) the output of silicon carbide has to be restrained and (3) the production of electrolytic aluminum will be reduced. However, the times to implement these three stages are not specified yet. In order to investigate this preliminary proposition, our company has negotiated with the Government of Qinghai Province on the following three matters ; Namely, (1) Qinghai Wutong (Group) Industry is the best company in China, having set up the countermeasures for saving energy and environmental pollution., (2) Most of our customers are major steel companies in China and overseas countries and the stoppage of the supplies has turned to be the matter of reliance., and (3) The employment by our company is the largest in Qinghai Province and the suspension of operation has to put a considerable influence on the community. Referring to these points, our company has earnestly asked the Government of Qinghai Province to investigate this matter with full attention but it is not known yet how does the Provincial Government judge of our explanations as mentioned above. The Government of Qinghai Province has also asked the Central Government of China to loosen the regulations for facilities to produce ferro-alloys by means of mentioning (A) the Province has already achieved a high level of the standard to save energy, (B) the poverty in this province is extremely high and the natural circumstances are very severe, and so on. However, no rely to this appeal is so far seen. Qinghai Wutong (Group) Industry is one of the largest and promising enterprises in Qinghai Province and has seriously asked the authorities concerned to suspend part of the production instead of a whole stoppage. (8)Question : How and when is Qinghai Wutong (Group) Industry scheduled to expand the capacity for production of ferro-silicon ? (8)Answer : The company has planned to convert part of the facilities for standard ferro-silicon to that for high purity ferro-silicon and is scheduled to produce 100,000 tons per annum of this special grade ferro-silicon from next year as an additional output. Note : The paragraph of Qinghai Wutong (Group) Industry Co., Ltd. is finished. (To be continued) |
| last modified : Tue 05 Oct, 2010 [10:03] |
