Wu’an adds more iron-making facilities into Q3 curtailing
According to a government release on July 7, besides all these steel mills, six coke plants and two cement plants are also included in the latest round of curbs and ordered to observe production cuts. Late last month the city authority had hinted that a new round of production restrictions on local industrial enterprises would kick in from July 1 though details had been missing then, as Mysteel Global reported.
In the latest notice, all the 14 local steelmakers have been advised of the specific number of days their equipment to be suspended during the period, with each mill’s cutbacks individualized based on their circumstances, according to the notice.
Therefore, among all the 43 sintering plants and all the 43 blast furnaces at the 14 steel mills host, 25 operative sintering machines and 25 blast furnaces will face suspension over the two months. No reference was made to possible restrictions in September, however.
Wu’an, a county-level city under Handan city, a major steel production base, contributes to around 80% of Handan’s total 51.7 million tonnes/year crude steel capacity, according to Mysteel’s database.
The latest round of curbs has included ten newly-added sintering plants and eleven newly-built blast furnaces, and the affection on local molten iron output is estimated at about 63,000 tonnes/day, according to Mysteel’s calculations.
“We are meeting the government’s requirements and have suspended our sintering machines and blast furnaces by now,” confirmed an official with Wu’an Wen’an Iron and Steel Company, a 1.9 million t/y steelmaker, adding, “because of this restriction, we have also reduced our procurement of raw materials.”
According to the document, Wu’an Wen’an needs to suspend one 108 sq m sintering plant during July 1-August 31, one 108 sq m sintering plant during July 10-August 31, one 510 cu m blast furnace during July 1-August 31 and one 510 cu m blast furnace during July 19-August 31.
“The limits placed on steel production in Q3 have been much stricter than those in Q2,” a Beijing-based source observed, explaining, “in this round, steelmakers are required to observe nearly 40% reduction on their sintering and blast furnace capacities, while they were only asked to reduce steelmaking capacities by around 20% in the previous round.”
In April, the Wu’an government had ordered all the local steel mills to curb iron-making facilities including sintering machines and blast furnaces over April-June, as reported, and the 14 steelmakers were asked to halt operations on 20 sintering plants and 20 blast furnaces, though the actual practice varied among steel mills, with some allowed back on stream within April, some within May, while the others remain shut, Mysteel Global notes.
The latest curbs on July 7 gave a lift to local steel market sentiment, with the expectation that steel prices will rise later, the Beijing source anticipated, but for now, steel prices in the city has remained stable. On Tuesday, the price HRB 400 20mm dia rebar in Beijing was at Yuan 3,910/tonne ($568/t) including the 13% VAT, unchanged from Monday.
Written by Lindsey Liu, liulingxian@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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