China's top steelmaking city set to deepen output curbs over summer

12 July 2018

The top Chinese steelmaking city of Tangshan has ordered steel mills, coke producers and utilities to cut output further this summer, according to a document from the city government, the latest step to curb smog in one of the country’s most polluted areas.

The move to deepen cuts in emissions will last for six weeks from July 20 until Aug. 31, according to the document, which was reviewed by Reuters. That will be in addition to 10-15 percent capacity cuts imposed from March to November.

The document did not instruct factories to cut output by a certain amount, but told the city’s local districts to set their own detailed plans for curbing production by July 13.

The curbs mark one of the latest steps in Beijing’s ‘war on pollution’ as it pushes to clear the country’s notoriously polluted skies.

“Sintering machines and blast furnaces will be major targets of production cuts in the steel sector and could be at as much as 50 percent depending on emission levels at mills,” an official at the environment department of Tangshan’s government told Reuters by phone. He declined to be identified as he is not authorized to talk to media.

Sintering is a process where iron ore is heated into a mass as a precursor to making hot metal.

Factories located outside the city center that have completed steps such as “environmental upgrades” will not need to cut production by as much as some other sites, according to the document.

Tangshan produced 91.2 million tonnes of crude steel in 2017, accounting for 11 percent of the country’s total steel output.

Analysts at industrial data provider SMM expect the latest restrictions in Tangshan to reduce production by up to 150,000 tonnes of hot metal a day.

Production curbs will also be imposed on other industries that consume large amounts of power or cause relatively high levels of emissions such as the cement and glass sectors, the government said in the document.

The city aims to reduce sulfur dioxide emissions by 31 percent, nitrogen dioxide emissions by 21 percent and carbon monoxide emissions by 24 percent by the end of August compared to average emission levels in the first-half of 2018.