Hebei province cuts 2.4m tonnes of iron, steelmaking capacity this year

More than 2 million tonnes of iron and steelmaking capacity have been cut in China’s Hebei province by the end of October, its Industry & Information Technology Department said last Friday November 1.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

The province – China’s steel production hub – has cut 1.3 million tonnes of iron making capacity, 1.1 million tonnes of steelmaking capacity and 3.6 million tonnes of coke capacity as at October 31, according to the announcement.

Not only were the capacity cuts completed two months ahead of their deadline, they also exceeded Beijing’s requirements, the provincial government said.

Beijing had ordered Hebei province to cut 800,000 tonnes of iron making capacity, 200,000 tonnes of steelmaking capacity and 400,000 tonnes of coke capacity by the end of this year.

The provincial government announced in September that 60 million tonnes of steel capacity will be cut by the end of 2017 to control air pollution in the region.

But the steel market has yet to see a significant drop in output. The country’s daily crude steel output stood at 2.1068 tpd in mid-October, according to estimates released by China Iron & Steel Assn.

“We had been cynical when the government first started talking about putting pressure on the steel industry to reduce emissions but, for Hebei at least, the effects have been real,” Macquarie Research said in a report based on a tour to Hebei.

With production restricted and mills making meaningful adjustments to their raw material blends, premiums for higher quality raw materials are being driven up, it said.

“Mills were being encouraged to install desulphurisation equipment or risk being forced to shut down. Indeed, shutdowns were already occurring with the particular pressure on the use of sinter plants. The larger mills we spoke to said they already had such equipment in place but that smaller mills generally did not and were forced to reduce output as a result,” Macquarie said.

More production cuts are likely to happen in early November.

“We may see some temporary production cuts possibly ordered by the government before and during the third plenary session [of the Communist Party of China’s central committee] in November,” a Beijing-based analyst said.

The problem will be an even bigger highlight if there is smog during the session, he added.

What to read next
Following a six-week consultation period, Fastmarkets can confirm it will amend the calculation method for all the average functions on the Fastmarkets platform from Wednesday March 1, 2023.
Consolidation, the recycling of electric vehicle batteries, US steel exports and the benefits of sustainable steelmaking were key talking points at Fastmarkets’ Scrap & Steel 2023 conference in Dallas in January
Green shoots of increased demand will emerge in US ferrous markets courtesy of the Biden administration’s trillion-dollar infrastructure package in 2023, Schnitzer’s executive vice president and chief strategy officer Richard Peach said at Fastmarkets’ Steel and Scrap Conference 2023 in Dallas, Texas
US special bar quality steel prices rose in January in line with rising scrap and alloy costs, according to market participants
European metal industry association Eurometaux has called on the European Commission to follow the lead shown by the Inflation Reduction Act and deliver a “powerful” policy to support the industry in the EU while it tries to keep up with the move to a new generation of energy markets
The fallout from Russia’s invasion of Ukraine is changing global trade flows for bauxite, with Brazilian material once again flowing into China and with the introduction of export restrictions elsewhere likely to influence availability through 2023
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.