Steel mills in East China’s Jiangsu province are bracing themselves for operations’ disruption from the one-month environmental protection inspection the provincial authority to proceed in eight cities along the Yangtze River since April 24, Mysteel understands from the market sources.
The latest check-up will be conducted in Nanjing, Wuxi, Changzhou, Suzhou, Nantong, Yangzhou, Zhenjiang, and Taizhou, with the focus on industrial zones and enterprises identified with environmental issues, and it will be in two phases with crosschecking among cities on April 24-May 13, and provincial inspections on May 14-23, according to the notice by the Jiangsu Provincial Environmental Protection Office on April 23.
Jiangsu is China’s second largest steelmaking province after Hebei with 104.3 million tonnes of steel output in 2017, or 12.5% of the country’s total, according to the data from China’s National Bureau of Statistics.
So far, the provincial investigation has yet had any visible affection on the local mills’ normal operations, according to Mysteel’s check on eight mills in Jiangsu, but in the longer term, it will be unavoidable, and some mills already received instructions to do so, according to market sources.
“We have cut our sintering capacity by 50% from the previous 20%, and have been consuming more pellets in blast furnaces,” an official from a Changzhou-based steel producer said, adding the mills is also building new sintering plants to substitute the existing ones.
An official from a Suzhou-based steel mill confirmed receiving the government notice on the checks, disclosing that they would conduct maintenance on one of its sintering plants for two months since mid-May because of the checks, though “operations have been as per normal now”.
Xuzhou, however, may be able to act as a reference to the eight cities for possible impacts of the checks as the city started a separate waste emission checks on local iron and steel mills since April 9 that will last until the end of September or even longer depending on the severity of the issue, and all that fail to pass the tests will be shut down, as Mysteel reported, illustrating Jiangsu province’s resolve in dealing with pollution.
Steel mills in Xuzhou, therefore, have already felt the heavy blow, and some finished steel products, with obvious shortages, saw prices up, Mysteel understands.
“Many blast furnace and sintering plants have been halted with the resumption date indefinite. As a result, there have been signs of supply shortage in some finished steel products especially construction steel products, and we have lifted our prices accordingly,” a steel trader surnamed Lin in Xuzhou commented on Thursday.
As of April 26, Mysteel’s HRB 400 20mm dia rebar price in Nanjing rose Yuan 270/tonne ($43/t) from April 8 to Yuan 4,070/t including 17% VAT, more substantial than the Yuan 180/t rise over the same period nationwide to Yuan 4,045/t including 17% VAT.
A steel trader surnamed Qiao in East China’s Shandong province also anticipated the ripple impact of steel shortage in Jiangsu to the neighboring Shandong soon.
“Traders’ steel stocks are dwindling, and it will only be a matter of time to see the steel price in Shandong to pick up further,” he said.
During the period, the rebar price in Shandong increased Yuan 320/t to Yuan 4,080/t including 17% VAT as of April 26.
Edited by Hongmei Li, firstname.lastname@example.org