than 2 million tonnes of iron and steel production capacity
were cut in Chinas Hebei province through the end of
October, Chinas Ministry of Information and Technology
said Nov. 1.
Chinas steel production hub, has cut 1.3 million tonnes
of iron production capacity, 1.1 million tonnes of steelmaking
capacity and 3.6 million tonnes of coke capacity as of Oct. 31,
the ministry said.
The capacity cuts were
completed two months ahead of schedule and exceeded the
requirements of Chinas central government, the provincial
Beijing had ordered
Hebei province to cut 800,000 tonnes of iron production
capacity, 200,000 tonnes of steelmaking capacity and 400,000
tonnes of coke capacity by year-end.
government said in September that 60 million tonnes of steel
capacity would be cut by the end of 2017 to control air
pollution in the region (
amm.com, Sept. 13).
But the steel market
has yet to see a significant drop in output. The countrys
daily crude steel production totaled nearly 2.11 million tonnes
per day in mid-October (
amm.com, Oct., 28).
"We had been cynical
when the government first started talking about putting
pressure on the steel industry to reduce emissions, but for
Hebei at least the effects have been real," analysts at
Australias Macquarie Group Ltd. said in a report
following a visit to Hebei.
restricted and mills making meaningful adjustments to their raw
material blends, premiums for higher-quality raw materials are
being driven up, Macquarie said.
"Mills were being
encouraged to install desulfurization equipment or risk being
forced to shut down. Indeed, shutdowns were already occurring
with the particular pressure on the use of sinter plants,"
More production cuts
are likely in early November.
"We may see some temporary production cuts possibly ordered
by the government before and during the third plenary session
(of the Communist Party of Chinas central committee) in
November," a Beijing-based analyst said.
A version of this
article was first published in AMM sister publication Steel