Tangshan Lifts Indefinite Production Cuts imposed on Steel Mills as a part of Anti-Pollution Measure

Over the past few months, Hebei’s largest steel producing city, Tangshan has been imposing production restrictions on industrial enterprises including steel mills as a part of their anti-pollution measures during winters. However, from 16 Feb’19, the city government has enforced level 1 smog alerts amid poor weather conditions due to which steel mills had to cut their output from 40 to 70% depending upon the four categories they fall into.

Now as per the latest updates, these emergency production cuts that were in force for about 26 days have been lifted by the Tangshan government.

According to the local government’s official notice posted Wednesday, the easing of the emergency output curbs after 26 days was in response to an improvement in weather conditions over the city which helped to disperse atmospheric pollution. But steel market sources have warned the mills that the relaxation is not an open invitation to mills to start operation in full capacity, pointing out that steelmakers still need to continue observing the strict controls on sintering and other operations during the rest of this month.

On 12 Mar’19, the Tangshan government had already temporarily lifted its ban on the use of trucks for transporting heavy goods into and out of local ports including Caofeidain and Jingtang.

Tangshan government is following rigorous production cuts this year as the inspection teams organized by Hebei’s provincial government have been in Tangshan since the beginning of March, sometimes using drones to monitor mill activity from above to ensure that mills are obeying orders.

China’s crude steel output in last two months, Jan-Feb’19 have been recorded at 149.58 MnT, registering an increase of 9.2% y-o-y basis, according to country’s official data. The higher production can be attributed to steel output cuts for environmental reasons in northern China being reduced this year.

However, Tangshan, has increased production cuts at local blast furnaces this month in response to central government criticism of its ineffective winter emissions controls. Most market sources believe China’s crude steel output is expected to fall in March, as a result of the tighter measures.