FEATURE: MEE to check against blanket curb on steel mills
Source: Mysteel
Nov 01, 2018 17:00
Li Ganjie, minister of MEE, said that during rounds of inspections of environmental protection facilities at industrial enterprises commencing now in many parts of the country, measures like “blindly suspending all related enterprises' production … just to cope with environmental checks should be strictly avoided”. Moreover, those enterprises whose facilities meet the related “green” standards should not be ordered to suspend production as those enterprises whose facilities fail to compile are made to do.
The MEE followed up Li’s statements with several more over Monday and Tuesday, indicating that throughout the month of November, a central government-backed program would see five teams of environmental inspectors fan out to ten provinces nationwide. The task of these is to gauge overall activities regarding environmental protection and current progress of rectification projects some enterprises had been ordered to undertake, with the focus being to uncover ‘fake’ improvements (to pass ‘green’ inspections) and to identify so-called “one for all” production restrictions.
A context is required here. As Mysteel has been reporting, this year China’s central government including the Party central committee and the state council is actioning programs aimed at reducing atmospheric pollution this winter in areas such as Tangshan and Handan cities in North China’s Hebei province – both steelmaking hubs – as part of a wider policy objective of emphasizing environmental protection.
But in September when Beijing was outlining its clear-skies policies for this year’s winter season (generally from November through until next March) the government stressed that last winter’s strategy of “one for all” blanket production curbs of sometimes 50% of operative capacity or more across all enterprises would not be repeated. This winter it would be up to local governments to decide the degree to which enterprises would be asked to trim output in accordance with local conditions.
Li made his comments as the teams of inspectors are being dispatched by the central government, with most of these teams commencing month-long, on-site inspections from the last two days of October or the first several days of November.
The number of inspectors in each team was not disclosed but each team would have two leaders, namely an official from the Chinese People’s Political Consultative Conference, a political consultative body, and another from the environment ministry. The ten provincial-level areas to be visited comprise Northeast China’s Liaoning and Jilin, North China’s Shanxi and Shaanxi, East China’s Anhui and Shandong, Central China’s Hubei and Hunan, Southwest China’s Sichuan and Guizhou.
During last winter, some local governments – possibly fearing the ire of the central government officials among the visitors – ordered all enterprises in certain areas or in certain industries to suspend operations completely for the duration of the inspections, forcing even those plants acting responsibly toward the environmental to shut as well. Doubtless Li also had local governments in mind when he warned against blindly implementing production restrictions.
“The impact of this round of environmental inspections on the steel industry is hard to predict at present,” a Shanghai-based analyst commented. “But in the past several weeks, the production restriction policies for the coming long-winter season released by governments of some cities such as Tangshan, Tianjin in North China, and Xuzhou in East China’s Jiangsu province have already abandoned ‘one for all’ policy, so far as the steel industries in those areas are concerned. This is good news for steelmakers earning handsome profits from high domestic finished-product prices and for raw materials suppliers and traders,” he added.
That said, he remained cautious about the overall impact on steel supply and raw materials consumption over the winter curbs season, warning that most local governments have not released details of the extent to which they plan to ask steelmakers to trim production in line with the updated policies.
Written by Victoria Zou, zyongjia@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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