Posted on 22 Mar 2021
A total of 23 steel mills in Tangshan, China’s top steelmaking city in North China’s Hebei, that have been discovered failing to adhere to air pollution control measures by various degrees have been imposed on a set of detailed restrictions until the end of 2021 starting March 20.
Tangshan government’s latest move, as shared in a new notice circulated in the market on Friday, matched the market anticipation on harsher control on steel mills for the rest of 2021, as Mysteel Global reported on March 18, and all the involved steel mills are ordered to cut their operative steelmaking capacities either by 30% or 50% for different durations, to reduce atmospheric emission levels.
Only two mills, Shougang Group’s Qian’an Iron and Steel and Shougang Jingtang Iron & Steel United, are exempt from the order, Mysteel Global understands.
Sources say that the notice identifies seven steel mills that are required to trim their operative steelmaking capacities to 50% over March 20-June 30 and by 30% over July 1-December 31, while the other 16 are to curtail their operative steelmaking capacities by 30% over March 20-December 31.
Among the seven are the four mills found failing to adhere to the ongoing control measures when China’s minister of Ministry of Ecology and Environment, Huang Runqiu, swooped on the four makers unannounced on March 10 during a visit to Tangshan for an ambush check on the local authority’s efforts in curtailing pollution, as reported.
Other than the general guidelines on the 23 mills, the notice spells out that facilities such as the sintering machines under 180 sq m, blast furnaces under 1,000 cu m, and converters under 100 tonnes should be among the first batch for the commencement of the restrictions, and blast furnaces should not only be banked but completely suspended with hot metal removed from the furnaces, according to the notice.
Such a clear-cut instruction will prevent any cheating and will make it harder and more costly to reignite a blast furnace, Mysteel Global notes.
To ascertain the execution of the restrictive measures, the 23 mills are requested to submit their detailed action plans to the Tangshan government by 10:00 (Beijing time) on March 20, and the Tangshan authority has filled the loophole, specifying in the notice that those furnaces that have been idled long or dismantled should not be included in the calculation of the trimmed capacity, market sources shared.
The latest movement with a blanket capacity cut targets at 30% or 50% among the 23 mills as well as for the duration until the rest of the year has been the first-time since winter restriction on pollution industries was introduced into the steel industry in the 2017-2018 winter, Mysteel Global notes.
A quick survey of Tangshan mills by Mysteel found that some local mills had received the notice on March 19 and have already cut their operative capacity to the specific levels, while the other producers confirmed that they will revise their production schedules in line with the new requirements.
The harsher restrictions on the Tangshan steel mills may be meant to impose pressure on the steel mills elsewhere in China too, an official from a Jiangsu-based steel mill commented.
“It clearly shows the central government’s resolution in cracking down on steel mills’ air pollution emissions. We will take this as a warning,” he told Mysteel Global.
This may also be one of the means for the Chinese authority to achieve its target to reduce the country’s steel output on year for 2021 too, Mysteel Global noted.
Based on this notice, Mysteel calculated that in theory, around 106,000 tonnes/day of pig iron output will be affected among these mills over March 20-June 30, and over July 1-December 31, the reduction in hot metal will be around 92,000 t/d, which will be equivalent to a reduction of 22.2 million tonnes of hot metal for the whole 2021, or 35.6 million tonnes of iron ore consumption.
It is still too early, though, to predict the actual production cuts and its impact on the steel supply and iron ore consumption in China for the coming months, Mysteel Global notes.
Source:Mysteel Global
