Hebei province tears down old blast furnaces

Hebei, China’s largest steelmaking province, demolished ten blast furnaces over the weekend in its bid to combat overcapacity.

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The blast furnaces in Tangshan, Handan and Chengde, as well as 16 basic oxygen furnaces, were torn down on Sunday November 24, according to a Xinhua report.

This resulted in the reduction of 6.8 million tpy of steelmaking capacity and 4.56 million tpy of iron making capacity.

Steel mills that owned these facilities included Tangshan Xingye, Hebei Steel’s subsidiary Chengde Steel, Handan Guangyao and Fengfeng Rongxi.

“The impact [on crude steel output] could be very limited since the cuts were made on idled capacity,” a steel mill source in Hebei said.

“Xingye’s blast furnace has been idling since 2010, while Guangyao had not been able to sustain its operation since 2011,” another steel mill source in Hebei said.

“It at least demonstrates the provincial government’s resolution. But the government’s actions next year will be crucial, as it will become increasingly difficult to reduce capacity after the idled ones have been removed,” a steel mill source in eastern China said.

The market will play a part in this, as there would be steel mills forced to suspend production after years of losses, he added.

In the past two years, Hebei has phased out 17.16 million tpy of steelmaking capacity and 11.81 million tpy of iron making capacity.

The province still has a long way to go to meet the State Council’s target for it to cut 60 million tpy of capacity in five years.

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