Market divided on steel mills’ fate in 2019 winter
Source: Mysteel
Oct 17, 2019 11:30
What is new for this winter is that Beijing has been more thorough, specifying pollution control requirements for every component of the whole vale chain for these polluting industries, Mysteel Global noted by comparing the releases of 2018 and 2019.
In the release, it reminds Hebei province, China’s largest steelmaking hub, of its plan to eliminate a total of 14 million tonnes/year of iron and steel capacity and 3 million t/y of coking capacity under its annual target, Shanxi province, China’s largest coal production base of its removing a 10 million t/y obsolete coke capacity, and Shandong province of its 10.3 million t/y coke capacity shut-down.
MEE also urges Hebei to realise ultra-low emission for its 100 million t/y steel capacity, and Shanxi for its 15 million t/y steel capacity by the end of 2019.
Despite the rather clear-cut instructions, some market sources still anticipated that restrictions on steel mills may be loosened further from last winter for the 2019 winter.
“It is still too early to say the affection is definitely more or less than last year, as the overall target is there, it depends on what the means are to achieve it,” a Shanghai-based industrial analyst commented.
MEE admitted in the same release that 3% year-on-year reduction was not fulfilled in the 2018 winter, as the PM2.5 density increased 6.5% on year, and the number of days with heavy air pollution jumped by 36.8% on year, Mysteel Global noted.
Besides, market sources noted that the restriction in Hebei, with Tangshan in particular, has been running throughout the year of 2019 instead of an intense curbing only in winter months.
“At least for Hebei, it is no longer about winter, it could be anytime, at least this has been the case for 2019, so compared with 2018 or 2017, the winter restriction for 2019 may appear not as tough,” a Hongkong-based steel analyst commented earlier on.
MEE reiterated in the release the importance of shifting raw materials transportation to rail from road, highlighting that some steel mills should have their rail line completed constructions by the end of 2019, which is also part of the efforts to reduce diesel-fuelled trucks on the road for less pollution.
Written by Victoria Zou, zyongjia@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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