Chinas environmental protection ministry has set steel
capacity reduction targets for the Beijing-Tianjin-Hebei region
and its surrounding areas in a bid to improve the
countrys air quality.
This follows a similar
plan announced by Hebei provinces local government
earlier this month (
amm.com, Sept. 13), the same day the State Council
unveiled a national plan toward the same goal.
Tianjin city and
Shandong province, which borders Hebei, were ordered to reduce
their steel capacity to 20 million tonnes and 50 million
tonnes, respectively, by the end of 2017, the ministry said
Shanxi province, which
lies to the west of Hebei, needs to cut 6.7 million tonnes of
capacity by the end of 2017.
"(The plan) is
expected since these areas all have large, energy-intensive
capacity and are close to Beijing. But the ordered reduction is
not very large compared with that of Hebei province (which aims
to cut 60 million tonnes of capacity)," an analyst based in the
Chinese capital said.
Tianjin, Shandong and
Shanxi last year produced 21.24 million tonnes, 59.57 million
tonnes and 39.5 million tonnes of crude steel, respectively,
according to local data provider Custeel.
In addition to the
capacity reduction targets, the Chinese government will also
implement stricter regulations for selected industries.
New projects for
industries facing overcapacity, including steel, cement,
aluminum, flat glass and shipbuilding, wont be approved
in the Beijing-Tianjin-Hebei region and its surrounding areas,
the ministry said.
The effectiveness of
the plan remains to be seen.
"There have been (plans) on a similar topic almost every
year, but there are always projects being approved for some
reason. Therefore, we will wait and see the actual effect from
this one," Xu Huimin, an aluminum analyst at Shanghai-based
Huatai Great Wall Futures Co. Ltd., said.
A version of this
article was first published in AMM sister publication Steel