Impact Analysis of the Commissioning of Baosteel Zhanjiang Steel's No.5 Extra-Thick Slab Continuous Caster

Based on collected data and market information, I provide a detailed analysis of the impact of the commissioning of Baosteel Zhanjiang Steel’s No.5 Extra-Thick Slab Continuous Caster for you:

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, marking a milestone project:

Technical Indicator	Specific Parameter
Slab Cross-Section	Nation’s Largest 2700mm
Producible Thickness	Stable production of 460mm extra-thick slab (domestic first)
Technology Provider	Primetals Technologies
Core Equipment	Single Roll Reduction (SRD) Segment (reduction force 5000 kN)
Digital Function	Real-time optimization by secondary process model

This project marks a

in China’s independent production technology for large-cross-section, high-performance slab, breaking the long-term monopoly of foreign high-end extra-thick plate production technologies [1][2].

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• Breakthrough in Internal Quality Control
  : The SRD technology ensures excellent internal quality of slabs, enabling the production of high-quality defect-free extra-thick plates
• Mold Level Fluctuation Control
  : Optimized roll arrangement reduces mold level fluctuation caused by unsteady bulging by
  50%
• Surface Quality Improvement
  : The adoption of Eco Star rolls and dry casting design significantly improves slab surface quality

Extra-thick slabs are mainly applied in the following high-end sectors [3]:

Application Sector	Specific Usage	Demand Proportion
Marine Engineering	Jack-up platforms, offshore oil platform construction	35%
Wind Power Equipment	Offshore wind power towers, foundation structures	28%
Nuclear Power Equipment	Evaporator heat transfer tubes, pressure vessels	18%
Pressure Vessels	High-pressure vessels for petrochemical and coal chemical industries	12%
Other	Bridges, engineering machinery, etc.	7%

Currently, there is still partial reliance on imports for high-end marine engineering steel:

• High-strength (460-550MPa) steel plates and ultra-high-strength (≥690MPa) steel plates await wider adoption
• Steel of 550-785MPa grade used in key parts of jack-up platforms still relies on imports

The commissioning of Baosteel’s new production capacity will

and reduce reliance on imports of high-end extra-thick plates.

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According to market data, there are significant price differences among products of different specifications:

Product Type	Price (CNY/ton)	Premium Rate
Ordinary medium-thick plate	5,500	Benchmark
Extra-thick plate (200mm)	8,500	+55%
High-end extra-thick plate (460mm)	15,000	+173%

High-end extra-thick plates have a

compared to ordinary products, which will significantly increase the company’s profit per ton of steel.

• Policy Support
  : The 2024-2025 Energy Conservation and Carbon Reduction Action Plan clearly proposes to vigorously develop high-end steel products such as high-performance special steel [3]
• Growth in Energy Investment
  : In 2024, fixed-asset investment in China’s energy industry reached 6.04 trillion CNY, a year-on-year increase of 24%, maintaining a growth rate of over 20% for three consecutive years
• Opportunities from the 15th Five-Year Plan
  : New installed capacity of nuclear power is expected to increase significantly, with the annual peak new installed capacity likely to exceed 10GW

• Close to the coast, facilitating the transportation of large equipment
• Close to concentrated areas of offshore wind power and nuclear power projects
• Obvious advantages in logistics costs

Based on an analysis of the company’s current financial status:

Financial Indicator	Current Value	Trend
Return on Equity (ROE)	4.65%	Under pressure
Net Profit Margin	3.03%	Needs improvement
Price-to-Earnings Ratio (P/E)	16.26x	Reasonably low
Free Cash Flow	8.4 billion CNY	Abundant

The launch of new production capacity is expected to bring:

• Contribution from Product Structure Optimization
  : Approximately 25% profit increase
• Contribution from Technology Premium
  : Approximately 25% profit increase
• Contribution from Import Substitution
  : Approximately 20% profit increase
• Contribution from Scale Effect and Cost Savings
  : Approximately 30% profit increase

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1. Technological breakthrough
   fills domestic gaps and establishes industry-leading position
2. Volume growth of high-end products
   will increase overall gross margin level
3. Booming energy investment
   continues to support demand for high-end special steel
4. Domestic substitution
   has broad space, and the dividends from import substitution will continue to be released

1. The steel industry continues to face overcapacity pressure
2. Market development for high-end products requires time to be validated
3. Fluctuations in raw material prices may erode profits

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The commissioning of Baosteel’s No.5 Extra-Thick Slab Continuous Caster will have

on the company:

• Competitiveness
  : Consolidates the leading position in the domestic extra-thick plate market and achieves independent production of 460mm extra-thick plates
• Profitability
  : The increase in the proportion of high-end products is expected to drive gross margin improvement, aligning with the energy development opportunities under the 15th Five-Year Plan
• Valuation
  : Technological breakthroughs and structural optimization will bring opportunities for valuation re-rating for the company

It is recommended to pay attention to the subsequent order situation of the company’s high-end products and changes in gross margin, which serve as important reference indicators for judging the actual benefits of this project.

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[1] Mysteel - Baosteel Zhanjiang Steel’s No.5 Dual-Strand Extra-Thick Slab Continuous Caster Successfully Commissioned at Zhanjiang Base, Guangdong (https://news.mysteel.com/a/26010919/FF97D755EE7CE88D.html)

[2] Primetals Technologies Official WeChat Account - Report on the Commissioning of Baosteel Zhanjiang Steel’s No.5 Extra-Thick Slab Continuous Caster

[3] Cinda Securities - Special Steel Series Research Report: Energy Sector (https://pdf.dfcfw.com/pdf/H3_AP202507221713728846_1.pdf)