Industrial gas major Linde has signed two agreements with China South Steel, a member of one of the world’s largest steel enterprises, China Baowu Steel Group Corporation.
Linde will expand its industrial gas operations in Shaoguan, Guangdong Province, by signing an agreement to de-captivate and upgrade an air separation unit (ASU) at China South Steel’s plant.
With this move, Linde’s total on-site production capacity in the city will reach around 130,000 cubic metres per hour.
The agreement also includes an extension of Linde’s long-term contract with China South Steel for industrial gas supply, catering not only to the steel plant but also to Linde’s local merchant customers.
Commenting on the announcement, Will Li, President Greater China at Linde, said, “Linde’s gases play an important role in steel manufacturing, helping to make our customers more efficient and productive.”
“This high-quality investment meets our strict investment criteria, secures future growth and enhances Linde’s network density in one of China’s largest regional economies.”
China is the world’s largest steel producer with an annual crude steel production volume exceeding one billion metric tonnes for the past two consecutive years.
According to GMK Center, the first quarter of 2024 saw Chinese steelmakers reduce steel production by 1.9% compared to the same period in 2023 to 256.55m tonnes.
In March, steel production in the country fell by 7.8% year-on-year to 88.27m tonnes.
This is thought to be caused by falling domestic steel demand due to the protracted real estate crisis ongoing in the country.
China’s Metallurgical Industry Planning and Research Institute (MPI) has predicted a 1.7% drop in steel demand in the country this year after a 3.3% decline in 2023.
The country’s steel exports surged by over a third last year, hitting 90.26m tonnes, the highest since 2016. However, shipments to the US dropped by 8.2% year-on-year to 598,000 tonnes, representing less than 1% of China’s total steel exports valued at $85bn in 2023.
