Posted on 11 Aug 2021
Steel mills in North China’s Hebei province are bracing themselves for intensified curbing on local steel industry in the winter of 2021-2022 because of the probable poor air quality and 2022 Olympic and Paralympic Winter Games in Beijing and Zhangjiakou of Hebei over January 2-20 and March 4-13 2022 respectively, though for now, no step-ups have been materialized despite recent speculations, market sources confirmed on Tuesday.
“We have not been notified by the local authority of a deeper cut, and we are still curtailing our steelmaking capacity by 30%-35%,” an official from a Tangshan-based steel mill confirmed.
However, curbs are very likely to be tightened in the coming winter months and around Winter Olympics, as until the end of this year, “a 30% curtailment is just a normal practice and a bottom line, and new and harsher measures will be imposed whenever air quality deteriorates or a grand event is held in China,” he added.
It is indeed a common practice in China for the cities or provinces that host a grand social, cultural or political event to kick in some air pollution measures before, in the middle of, and after the occasion, Mysteel Global understands.
Besides, “both the central and local governments in China have been paying growing attention to environmental protection in the recent years,” he said.
The official, however, denied any acknowledgement of any government notices that specify the detailed curbing measures during the Olympics or any definite steel cut targets for both Tangshan and Hebei for 2021.
An Tangshan government official also denied the release of such specific measures or steel production cuts on Tuesday, briefly commenting that the information is “untrue”.
An official from a steel mill in elsewhere of Hebei, however, agreed on the first industrial source’s anticipation, also expecting stricter measures to be implemented in the last few months of 2021, especially in the winter.
“In the cold winter days, air tends to be more still and air quality, thus, tends to be poor, so stricter control than now will be necessary,” he commented, but he would not expect the company’s steel output will be affected much by the Winter Olympics, given that the steelworks, though located in Hebei, is quite far from Zhangjiakou or Beijing.
Since 2017, China usually activates its winter pollution control measures around October until March in the regions with serious pollution issues such as Beijing-Tianjin-Hebei area and the Fenwei Plains, though the curbing measures have been optimizing in the past few years, Mysteel Global noted.
Meanwhile, the 23 Tangshan-based steel mills have been curtailing their operative steelmaking capacities by 30% since early July until the end of this year, local sources confirmed, which is just as the local authority requested back in March, and this is considered easing from the earlier on 50% capacity curbing on seven of the 23 mills since March 20-early July.
A steel trader in Handan, Hebei’s second largest steel production base after Tangshan also confirmed that “local steel mills have been maintaining stable operations with no signs of more curbing, against the market speculation”.
He, nevertheless, confessed that their steel trading improved slightly today due to the market concern on “less supply” because of the latest market rumour.
The curbing on its local steel mills since late March has seen Tangshan’s crude steel output decrease by 7.2% on year to around 64.4 million tonnes over January-June, according to the local statistics bureau, steeper than the 0.8% on-year drop in Hebei’s steel output to 121.5 million tonnes or in sharp contrast to the 12% on-year gain in the country’s steel output to 563.3 million tonnes, both for H1.
In 2020, Tangshan produced around 144 million tonnes of crude steel, or accounting for 57.7% of Hebei’s total.
Source:Mysteel Global
