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Beijing and the surrounding area of Hebei, including Yanqing and Zhangjiakou, will host 109 sporting events in 15 disciplines on February 4-20 in 2022 for Winter Olympic Games and March 4-13 for the Winter Paralympic Games.
Hebei is also the largest steelmaking area in China and includes the hub of Tangshan to the west, which accounted for 13.5% of steel production in China in 2020, according to the National Bureau of Statistics (NBS).
It is also a hotspot for industrial pollution, with other major industries such as coking plants and coal-fire power industries holding significant capacities in the area.
The Tangshan government has begun to seek feedback for new production cuts and pollution control measures ahead of the 2022 Winter Olympics based on a draft notice. The government aims to drop emissions to manageable levels during the sporting event.
The restrictions will happen in two stages. The first will take place from August 2021 to January 27, 2022, while the second will take place from January 28 to February 20, 2022 and from February 27 to March 13, 2022.
Market sources said this marks a turning point in China’s ferrous industry, because the new restrictions on blast furnace operations, sintering and pelletizing would mean a continual decrease in steel production and raw material demand all the way into the first quarter of 2022.
“This notice signals a new continuous policy from now until Q1 2022, even with the ongoing production curbs in Tangshan,” an industry source said.
Most steel mills in Tangshan are already required to cut production by 30% between July and December, except for steel mills classified as Grade A i.e. those which have met stringent requirement standards. Stage 1 Crude steel production in Tangshan should decrease by 12.37 million tonnes year on year in the first stage, data from the NBS shows. Tangshan produced about 144 million tonnes of crude steel in 2020.
Steel and coke projects which are under construction should not start up before March 13, 2022, while blast furnaces (BF) of 1000m³ and converters of less than 100 tonnes will be shut down gradually.
Steel mills are also required to complete their equipment upgrades to match Shougang Steel’s standards by 2021, which is the Grade A steel mill in Tangshan – the best-performing mill in terms of low emissions and facility upgrades.
The steel industry will use railway transportation for 95% of their carriage needs by 2022. If the mill cannot use railways, they have to use electric trucks, or low-emission trucks. Stricter Stage 2 In the first quarter in 2022, steel mills and coking plants will face even more stringent production and transport curbs.
Steelmakers which have been classified as Grade B will have to stop at least 30% of BF production, while those classified as Grades C and D will have to cut 50% BF production or idle them completely.
Those under Grade B and below will have to cut iron ore sintering and pelletizing completely.
For coking plants, those classified as Grade B should cut production by 35%, while those classified as Grades C and D will have to cut capacity by 50% and 65% respectively during the event.
Decarbonization complicates an already complex marketplace. Our latest analysis, ‘The true price of green steel‘, does a deep dive into the ripple effects that overhauling the markets will have on the steelmaking process and supply base.