China: Tangshan furnaces, re-rollers under new output cuts

Market chatter in Tangshan, China's largest steel production base, suggests that local authorities in the city have strengthened the severity of production restrictions on steelmakers as part of this month's air quality improvement measures.

No official announcement has been made so far by local authorities but Mysteel Global understands that from late on July 20, integrated steelmakers in the city and re-rollers are being asked to observe operational controls in their facilities as part of the latest round of restrictions announced on July 4.

On that occasion, Tangshan authorities had officially ordered local steelmakers to curtail sintering operations all this month to prevent air quality deterioration, as Mysteel Global reported, but no further controls had been ordered at that time.

Hearings from steelmakers conducted by Mysteel overnight on Thursday revealed that some local steel mills would halt one blast furnace each until the end of the month as requested, while some others said they were not required to halt further units besides those recently idled for maintenance.

By 12:00 Beijing time on Friday, 20 of the 89 blast furnaces that Tangshan steelmakers host were either undergoing maintenance (excluding long-term production halts) or being banked, according to Mysteel's latest tracking. In total, some 19,190 cu metres of furnace capacity is offline.

In Mysteel's latest weekly survey on the status of Tangshan blast furnaces published on July 20, some 15 units were stopped, which means that by Noon Friday, operations on another five units had been halted.

Mysteel estimates that the production halts on those 20 blast furnaces between now and end-July will equal a loss in Tangshan crude steel output of about 462,000 tonnes.

Written by Carly Chen, chenziyi@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.