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RIYADH: Baosteel, a Chinese state-owned iron and steel company, signed a memorandum of understanding with Saudi Aramco to construct an integrated steel mill producing plate in Saudi Arabia, Platts reported on Wednesday, citing the Shanghai-based company.
Once constructed it will be Baowu Group’s first overseas steel mill. According to China’s state-owned Shanghai Securities News, the mill will be based on direct-reduced ironmaking and electric arc furnace technology, and will contribute to the ongoing carbon reduction efforts in the steel industry.
The mill will also help the company to expand its presence in the global steel market, Baosteel said.
Following the agreement, a joint committee will be set up to carry out feasibility studies and form a joint venture, the company said.
China has capped its iron and steel capacity and production, while domestic steel demand has almost plateaued. Therefore, it has become crucial for Chinese steel mills to expand their overseas presence, a market source said on Wednesday.
Baosteel produced 15.65 million tons of crude steel in 2020, while its parent Baowu Group produced 115.29 million tons.