At least 18 metallurgical coke-producing plants in North China’s Hebei province have received orders to scrap a total of 12.6 million tonnes/year of excess coking capacity by the end of this year.
This is in order for the province to meet its goal of controlling coking capacity and optimizing the industry’s structure, according to a recent survey report by Mysteel — a China-centric insight and global metal markets intelligence providing company.
The 18 coking companies, including mine- and steel mill-affiliated and independent plants, are mainly located in the cities of Tangshan, Handan and Shijiazhuang where most of the province’s steel and coking plants are based.
As of mid-July, Hebei province boasted some 81 mn t/y of coking capacity in operation. To reduce the impact that the elimination program will have on local coke supply, new and high-efficiency coking capacity will be commissioned – albeit in fewer plants – while the old plants are closed.
Hebei Xinxing Energy Technology, for example, will commission a 7.15-metre coking project with 1.9 mn t/y of capacity by the end of 2020 in Handan city. Xinxing Energy received approval to build a new project by “swapping” the 2.4 mn t/y capacity from four aging and inefficient ovens. The four ovens are to be completely dismantled by no later than December 31 this year, according to a notification by Hebei’s Industry and Information Technology Department.
Hebei province is China’s largest steel production base and the country’s second largest for coke production. However, as the province borders Beijing on three sides, the provincial government’s efforts to eliminate surplus steel and coking capacity – as well as its measures to control air pollution – are being closely monitored by the central government.
In June 2018, China’s State Council announced the inauguration of its “Blue Sky Safeguard” policy spanning 2018-2020 which, among other measures, required Hebei to cap steel capacity at 200 mn t/y by 2020. Coking capacity in Hebei was also to be controlled to 40% of the province’s steel capacity the same year, indicating that Hebei will have to reduce its coking capacity to 80 mn t/y in 2020.
Over January-May, Hebei produced 100.4 mn t of crude steel and 20.2 mn t of coke, 24.3% and 10.8% of China’s total respectively, according to data from the National Bureau of Statistics.
Note: This article has been published under an article exchange agreement between CoalMint and Mysteel.
By Aditya Sinha
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