Posted on 06 Sep 2021
North China’s Handan city, Hebei province’s second largest steel producing hub after Tangshan, is tightening production controls on local industrial plants including steel mills over September-October to improve air quality, according to a government document circulating in China’s steel market on September 2.
The new controls cover manufacturing and mining sectors regarded as major sources of pollution such as steel production, coke making, limestone mining and zinc oxide smelting, Mysteel Global notes.
For the steel industry, mills in Handan will be required to observe an additional 4.4-percentage point reduction on their production operations this month and next, while the blast furnace capacity utilization rate of 16 local steel producers will be limited to 53%-83%, with the variation based on each steelmaker’s environmental protection performance.
In addition, Handan must phase out 20 blast furnaces below 1,000 cu m and 20 converters below 100-tonnes, phase by phase, the document also requested. Over 50% of the units are to be shut down within this month, 70% to be shut before China’s winter heating season arrives (mainly starting from November) and all are to be halted by the end of this year.
Prior to these new controls, Handan’s steel producers have been obliged to comply with production curbs of 20%-30%, as a local steel producer confirmed. “All of us are not running at full capacity (so) the new orders mean that we need to reduce more production,” he said.
While most local sources agreed that the additional curbs over September-October will not much affect the current operations of the steelmakers, they believed that the shutdown of the small blast furnaces may result in a large reduction in steel output in Handan.
“There are a number of operative small blast furnaces in Handan (and) although some are to be replaced by new furnaces, there will be a gap in supply after the old facilities stop and until the new facilities are producing normally,” another mill source in Handan commented.
Like Tangshan, Handan’s curtailment of steel production is seen as contributing to China’s goal of limiting crude steel output this year to 2020 levels. Over January-July, Hebei province produced a total of 139.4 million tonnes of crude steel, down 3.9% on year, making it one of the only two provinces nationwide that saw on-year declines over the same period. Hebei nonetheless remained the country’s largest steel producing province, according to data from China’s National Bureau of Statistics.
Source:Mysteel Global
