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RPT-Chinese cities order steel output cuts earlier than expected to fend off smog
September 27, 2017 / 4:17 AM / 3 months ago

RPT-Chinese cities order steel output cuts earlier than expected to fend off smog

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BEIJING, Sept 27 (Reuters) - The city of Handan in the top steelmaking province of Hebei has ordered steel mills to halve output a month earlier than expected, according to media reports, the latest city to ramp up efforts to reduce the smog that blankets northern China during the winter.

At a meeting on Tuesday, Handan city authorities told local steel mills to cut blast furnace production by 50 percent from Oct. 1 until March, industry consultancy Mysteel reported without citing sources.

Companies in the downstream sector fabricating steel will also face restrictions, the report said, although no details were given.

The Handan city government did not respond to a request for comment.

The cuts are another another sign of a major industrial city in the world’s top steel producer taking action well ahead of the official winter heating season in northern China, which starts on Nov. 15. It is also likely to fuel concerns about demand for steelmaking raw materials, such as iron ore.

Tangshan, China’s biggest steel making city by output, on Sept. 25 enacted restrictions on pelletizing and sintering production to clean up the air quality. The city, also located in Hebei, ended the restrictions late on Tuesday.

Hebei province, which surrounds China’s capital Beijing, is cleaning up its air ahead of the Communist Party Congress, which occurs once every five years and will start in the capital on Oct. 18.

The government often shuts industrial plants ahead of major events to ensure clear skies.

Hebei is already under political pressure to cut concentrations of small, breathable particles known as PM2.5 by 25 percent over the 2013-2017 period, but it admitted earlier this year that it was still not properly enforcing state pollution standards and policies.

Tangshan produced 88.3 million tonnes of steel last year, 6.8 percent more than the prior year and more than the entire United States, putting it on the front line of the central government’s efforts to curb overcapacity in the sector. It aims to close around 8.6 million tonnes of annual production capacity this year.

On Tuesday, the city of Zhengzhou, capital of Henan province and south of Hebei, ordered blast furnaces to cut production by 50 percent during the heating season, which it defined as from October to March, while electric arc furnaces and natural gas furnaces would have to halt at times of yellow or higher pollution alerts. (Reporting by Tom Daly and Josephine Mason; Editing by Christian Schmollinger)

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