The Tangshan government in North China’s Hebei province has requested all its steel mills to curtail their coking, sintering and blast furnace capacities over July 10-31 tentatively to improve the air quality as Hebei province posted worsened air pollution in the past couple of months, local steel market sources confirmed on July 10.
"Sintering capacities will be cut by 50%, coking process will be extended to over 30 hours from less than 20 hours, and for blast furnaces, steel mills in the areas such as Fengnan and Fengrun districts will be cut off by 50%, and those in the outskirts of Tangshan by 30%”, an official from a steel mill in Tangshan said.
An official from another steel mill in Hebei confirmed the curbs on sintering and blast furnaces, commenting, “the latest round of curbing has indicated that the central government is unsatisfied with the air quality in Tangshan these days especially under the circumstance that the environmental protection inspections have already been intensified a lot since the beginning of 2018.”
"It seems that Beijing has decided to keep a close eye on Tangshan,” he added.
No official notice has been released so far, according to the market sources.
In May, four cities in Hebei were among the top ten most polluted cities among the 74 major Chinese cities under Beijing’s consistent monitoring, namely Tangshan, Shijiazhuang, Handan and Baoding, and Tangshan was the most polluted city among the 74 both for April and May, according to the releases from China’s Ministry of Ecology and Environment.
The latest round of curbing seems to have already lent support to local steel prices, Tangshan steel mill officials agreed, and the Tangshan billet price already climbed up by Yuan 50/tonne ($7.6/t) as of 15:30 to Yuan 3,680/t EXW and including 16% VAT, according to Mysteel’s daily market survey.
It is hard, however, to estimate the actual affection on the local steel output, as “the actual situation depends on how strictly the local steel mills will carry out the curbing measures for the days to come,” the Hebei source admitted.
Tangshan steel mills are prepared for the restriction to be extended beyond July if air quality fails to see substantial improvement after the July action, according to the Tangshan source.
"The decisive factor will be air quality in Hebei, as Beijing is determined to clean up the air in the Tianjin-Beijing-Hebei area, and it will take as long as it has to achieve the result,” he said.
Hebei has remained China’s top steelmaking hub though its crude steel capacity has been reduced to around 240 million tonne/year from over 300 million t/y after excess capacity cuts over 2016-2017.
Written by Hongmei Li, li.hongmei@mysteel.com and Venus Wang, wangyi@mysteel.com
