Some electric-arc-furnace (EAF) steelmakers will suspend some of their production in September, following the new campaign of environmental inspections launched by China’s Ministry of Ecology and Environment (MEE) on August 25.
The MEE is searching out illegal high energy-consuming and heavy polluting projects, any production facilities (including those for steel) that should have been dismantled but which have been secretly restarted, and any violations of environmental protection rules and regulations, as reported. The ministry is despatching seven inspection teams to five provinces and to two state-owned enterprises checking for any misconduct.
The five provinces are Northeast China’s Jilin, East China’s Shandong, Central China’s Hubei, South China’s Guangdong, and Southwest China’s Sichuan, Mysteel Global noted, and enterprises are slowing operations in preparation for the inspections.
“As of now, six EAF mills in Sichuan and 14 EAF mills in Guangdong have been notified to reduce production accordingly,” a Shanghai-based market watcher confirmed, adding that around 20,100 tonnes/day and 14,300 t/d of crude steel output in these two provinces will be affected respectively.
Sources also confirmed that inspection teams have arrived in Jilin, Shandong, and Hubei provinces, but which EAF mills are to be checked and how much production could be lost remains unknown.
As of August 26, the EAF capacity utilization rate among the 71 EAF steel mills nationwide which Mysteel regularly surveys had dipped by only 0.44 percentage points on the week to 61.16%. However, this week’s survey results are likely to show that the production restrictions, maintenance shutdowns, and stoppages for emissions checks begun last week are taking their toll on EAF capacity utilization.
“EAF mills in southern areas of China have been forced to either halt their EAF operations during peak hours or just shut down the furnaces for over three months amid power shortages. Consequently, the impact of the environmental inspections on the EAF steelmaking industry seems to be modest so far,” the Shanghai source explained.
Written by Lindsey Liu, liulingxian@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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