Tangshan curbs sintering operations again as air quality falls

Authorities in Tangshan in North China's Hebei reimposed production curbs on sintering plants operated by some local steelmakers effective from August 24, citing their dissatisfaction with the city's poor performance in the central government's latest ranking of air quality nationwide, industry sources said. Previously, local mills were ordered to curtail sintering operations during the whole month of July, as Mysteel Global reported.

This time, some steel mills in the city's Fengnan, Laoting and Caofeidian districts had each received verbal notifications from local government officials to halt one of their sintering machines starting at 14:00 Beijing time Thursday and to keep them stopped till the end of this month, according to information gathered by Mysteel.

The latest sintering curbs were imposed after China's Ministry of Ecology and Environment on August 22 published its ranking of air quality over the country's 168 major cities in July. The post on the ministry's website placed Tangshan seventh from the bottom- better than its ranking of third- worst nationwide in June but barely an improvement.

As of late Friday, the scope of the curbs had not yet been widened to include blast furnace (BF) operations among the targeted mills, a Tangshan-based market insider observed.

"But if air quality over the city remains poor, it is possible we'll see the Tangshan government tighten the curbs later, asking steelmakers to rein in upstream operations such as their BFs," a Shanghai-based market source commented. In fact, local mills were subject to a similar staggered process of operational cutbacks during the city's prior round of curbs, as reported.

Meanwhile, all steel re-rollers in Tangshan's Fengrun district were required to halt reheating and rolling operations from 20:00 Beijing time, also on August 24, though in their case, when the constraints will be lifted remains pending, according to Mysteel.

Consequently, the operational rate among the 35 section re-rollers in Tangshan under Mysteel's regular survey may fall to an average of 25% over the coming few days, from the reading of 51.1% on August 23, Mysteel estimated.

"Although the local government has not stated why the production restrictions are also being imposed on re-rollers, most market insiders believe it's another attempt by the authorities to reduce air pollution," the Tangshan source said.

From a more immediate perspective, this curb on re-rollers' operations will help to ease the pressure the rollers face from their accumulating stocks of sections at their plants, according to her. In fact, before they were ordered to halt production, some re-rollers in the city had already suspended operations due to the deepening losses they're suffering when selling their long products, she remarked.

Written by Lea Li, liye@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.