China: Tangshan BF use stays high despite curb orders

Capacity utilization of blast furnaces in Tangshan, China's top steel producing city in North China's Hebei province, stayed high in early July, even though the city government had earlier ordered most producers to halt or curb their operations from July 1 as an anti-pollution measure, according to Mysteel's latest weekly investigation.

The latest survey across 126 blast furnaces at 33 integrated mills in Tangshan showed that their capacity utilization averaged 87.8% as of July 2, unchanged on week or on month, though the rate was 13.1 percentage points higher on year.

"Although the mills concerned all confirmed that they had received the formal government notice (of the production curbs), no mills had really started to implement the restrictions," a Tangshan-based industry source told Mysteel Global on Monday. "A few mills maintained that the government had given them a grace period of seven days and some declared that they were working on their implementation plans," she said.

The government order issued on July 1 required 27 of the 33 Tangshan steel mills to halt some of their facilities, including blast furnaces, sintering machines throughout July-September. The order was detailed, even identifying the specific facilities at each mill that are required to be stopped, Mysteel Global learnt from the document.

The order was among a package of local government plans to improve the city's persistently poor local air quality, Mysteel Global understood. In May, Tangshan was ranked last among the 168 cities nationwide whose air quality is ranked monthly by China's Ministry of Ecology and Environment.

Meanwhile, over the past week demand for billet in Tangshan remained poor, as the city's steel re-rollers had slowed their operations as part of the restriction measures, according to the source. The re-rollers were cautious about buying semis, noting their high levels of finished steel stocks.

Mysteel's price for Q235 150mm square billet in Tangshan therefore, dipped by Yuan 10/t ($1.4/t) on week to Yuan 3,310/t EXW and including 13% VAT as of July 3.

As of July 2, billet inventories at 14 Tangshan trading houses totalled 293,500 t, higher by another 13,700 t or 5% on week, while the semis' stocks at 53 Tangshan steel re-rollers were at 419,200 t as of July 1, down further by 16,300 t or 4% on week.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

Photo Credit - World Steel