China's grand expansion

Projected demand for steel has accelerated development and expansion of large-scale mechanised open cut coalmines in Mongolia, Inner Mongolia and Xinjiang. New parallel, dedicated tracks on mainline networks carry coal trains from far western Xinjiang to industrial and energy bases in the east.

New tracks in the northeast connect the Russian Far East and North Korea to China's vast network as part of China's trans-Asian network.

One system consuming record levels of steel is the hi-speed rail network and dedicated rolling stock. Beijing allocated US$50 billion for construction of the high-speed rail system in 2009. By 2012, this ambitious system will have 42 hi-speed railway lines totalling 13,000km. By 2020, that will total 18,000, and by 2023 it will total 120,000km.

Baotou Steel claimed a world record 1.3 million tones of steel rail in 2009 that included high-speed rails, standard rail for the upgrade and expansion of China's rail systems and standard rail for railways for foreign aid and loan projects.

But it is not just steel for the railway tracks. Substations, related infrastructure, and new railway lines connecting stockpiles to the nearest trunk line or dedicated coalmine requires more steel. Excluding the coal railways, China will require more than 800 complete new trains. Coal industry expansion and railways will increase demand for additional locos and rolling stock.

This huge railway expansion is mainly electrified, requiring considerable tonnages of steel just to carry and manage the 90 per cent coal fired power supply.

Energy

The existing coal fired energy expansion program continues to the end of 2020, commissioning one coal-fired power station with an average individual capacity of around 2gW, every 10 days.

China's nuclear expansion will consume a wide range of construction, as well as standard and speciality steels for buildings, reactors, generation, distribution and waste disposal components. China's continuing hydro expansion is also a major consumer of construction and speciality steels.

Stimulus spending is driving a major alternative energy expansion program supported by the CDM (Clean Development Mechanism) and reflected in the GPD (gross domestic product).

Rapid expansion of wind power increased the demand for steel for the towers and nacelles, as well as generators and turbines. Onsite demand also includes construction steel for the bases, as well as buildings, sub stations and security fencings. The biggest onsite demand for steel however, is the coal fired backup power stations and related infrastructure, dwarfing steel demand for wind power generation facilities.

Offsite, there is also considerable steel demand to rebuild and upgrade a grid system that is presently incapable of receiving fluctuating wind generation and managing demand. There is also construction of China's high and ultra high voltage transmissions systems to carry and control huge and increasing loads.

Solar power also has considerable demand for steel, and like wind generation, requires large scale on site coal fired power generation plants and related infrastructure for backup.