SHANGHAI, Aug 3 (SMM) – Chinese authorities are mulling details of production cuts in the ferrous and non-ferrous industry across the smog-prone Beijing-Tianjin-Hebei region and nearby areas, during the upcoming winter season, SMM learned from market talk this week. The cuts are part of an effort to reduce smog and improve air quality, and are stricter than cuts last winter.
Compared to last year, SMM finds major differences as follows:
Steel mills across six key cities, Tianjin, Shijiazhuang, Tangshan, Handan, Xingtai and Anyang, will be required to cut capacity by half during the heating season from November 15, 2018 to March 15, 2019. Tianjin and Xingtai are new additions to the list this year. Mills in the remaining cities in the region will need to shut no less than 30%.
Cuts are determined from the designed capacity of blast furnaces. Captive facilities including sintering machines and coke ovens will also undertake cuts or suspensions, which were not required in the previous year’s plan.
This year's plan will allow mills with pollutant emissions, across production and transportation processes, that meet the ultra-low standards to be free from the staggered production model, though SMM believes that only two mills meet these standards currently. A cut of 50% would be still imposed on these mills when pollution exceeds the orange-alert level.
Coking duration at all coke plants across the regions will be required to be extended beyond 36 hours during that period. Plants can avoid staggered production if their coke ovens have a hood, if they have installed desulphurisation and denitrification facilities and the emissions are lower than the ultra-low standards.
Casting and smelting facilities in the casting industry will be suspended. This excludes natural gas furnaces and electric furnaces with emissions that meet the targets. Such suspension can be exempted if a plant obtains approval from the local government. Natural gas furnaces and electric furnaces should still cease operation if pollution exceeds the yellow-alert level.
In terms of the impact to demand-side issues such as trucking restrictions, the latest proposal for this year looks slightly harsher than last winter for restrictions on days of heavy pollution, though outside of the heavily polluted days the number of exemptions for industries which meet certain standards, namely their power source and emissions, appears to be greater than last year. The policies aim for a 5% improvement in PM2.5 levels and a 5% reduction of the number of heavily polluted days. This suggests that demand restrictions will have to be as strict as last year, or greater.
Details:
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Action Plan on Comprehensive Control for Autumn and Winter Air Pollution in Beijing-Tianjin-Hebei and Nearby Areas |
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2017 |
2018 |
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Date |
October 1, 2017 – March 31, 2018 |
October 1, 2018 – March 31, 2019 |
Note |
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Days |
182 |
182 |
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Geographic coverage |
Beijing, Tianjin, and 26 cities in Hebei, Shanxi, Shandong, and Henan provinces including Shijiazhuang, Tangshan, Langfang, Baoding, etc. |
Beijing, Tianjin, and 26 cities in Hebei, Shanxi, Shandong, and Henan provinces including Shijiazhuang, Tangshan, Langfang, Baoding, etc. |
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Basis |
Thoroughly rectify heavy pollutant companies, reduce their emissions and use of coal, highlight staggered production plans, and strengthen governmental supervision to address heavy air pollution.
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With the industry structure, energy, transport, and land as a foundation, promote clean energy and rectification of heavy pollutant companies, overhaul bulk freight transport from road to rail, highlight remediation on diesel trucks, industrial furnaces and emission of volatile organic compounds (VOCs), and strengthen governmental supervision to address heavy air pollution. |
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Targets |
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Steel industry |
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Coking industry |
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Casting industry |
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Building materials industry |
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Nonferrous metals and chemicals sector |
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Transportation beyond peak hours |
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