China: Hebei to Cut Another 14 MnT Steel Capacity in 2020

North China's Hebei, the country's top steel-producing province, has vowed to cut another 14 million tonnes/year of iron-making and steel production capacity in 2020, an official from the Hebei Development and Reform Commission confirmed on Wednesday. This year is the last for the province to the meet the target set it by the central government to eliminate a total of 40 million t/y of capacity over 2018-2020, Mysteel Global notes.

The efforts of other local and provincial governments across China had already resulted in the country as a whole fulfilling Beijing's goal of eliminating 100-150 million t/y of iron and steel capacity by 2020, years ahead of schedule.

For its part, Hebei is still on its way towards achieving its required cuts but after it does and the 40 million t/y is scrapped, the province will be able to control total iron and steel capacity under its jurisdiction to within 200 million t/y this year, as requested by Beijing.

"It is a target assigned by the central government after evaluating all related factors and balancing every party's interests, with environmental protection as a key consideration," the official said. "It is a goal that we must achieve," he said firmly.

Hebei cut 12.3 million t/y of iron and steel capacity in 2018 (surpassing the goal of 10 million t/y) and last year permanently removed another14.02 million t/y to meet the province's 2019 target of 14 million t/y, Mysteel Global understands.

"Last year's goal was a struggle to achieve," admitted the commission official. This was not only because the removed facilities were in productive use by many mills, but also due to the difficulty of balancing each individual mill's iron and steel capacities after the elimination, as the sizes of the upstream facilities vary from each other, according to him.

Most of the capacity cuts were achieved through China's steel capacity swap arrangements inside the province, and through relocations of mills to other provinces outside Hebei, the official explained.

For example, during last year Xinxing Ductile Iron Pipes Co in the province's Wu'an city used the capacity quota of 1.41 million t/y - which it secured by eliminating three small blast furnaces - to swap for a 1,280 cu m blast furnace with 1.08 million t/y capacity. The extra 33,000 t/y is thus included in the capacity reduction list, as Mysteel Global reported.

Moreover, Beijing-headquartered Hebei Jinxi Iron & Steel Group will permanently shut 3-4 million t/y of steel capacity in Hebei's Tangshan city and build a new steel mill in Fangchenggang city in Southwest China's Guangxi, as reported.

The official said that which iron and steelmaking facilities at what mills will be removed in 2020 is still under study, and that the list will be released as soon as the candidate facilities are determined and confirmed.