Analysis of production cuts in winter season 2018-2019

게시됨: Aug 3, 2018 19:37
Chinese authorities are mulling details of production cuts in the ferrous and non-ferrous industries

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:

Action Plan on Comprehensive Control for Autumn and Winter Air Pollution in Beijing-Tianjin-Hebei and Nearby Areas

 

2017

2018

 

Date

October 1, 2017 – March 31, 2018

October 1, 2018 – March 31, 2019

Note

Days

182

182

 

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.

 

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.

 

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.

 

Targets

  • In targeted cities, average concentration of particulate matter with a diameter below 2.5 micrometres (PM2.5) will be reduced by 15% on the year.
  • The number of heavy-pollution days will be reduced by more than 15% on the year.
  • In targeted cities, average concentration of PM2.5 particulate matter will be reduced by 5% on the year.
  • The number of heavy-pollution days will be reduced by 5% on the year.

 

 

Steel industry

  • Implement a classified management system based on each plant’s emissions, and impose staggered production by the end of September 2017.
  • Steel mills in key cities such as Shijiazhuang, Tangshan, Handan, and Anyang are required to cut steel production by 50% in the heating season. The cut is based on actual production of their blast furnaces.
  • Cuts are checked through the actual power usage at plants.

 

  • Steel mills in key cities such as Tianjin, Shijiazhuang, Tangshan, Handan, Xingtai, and Anyang are required to cut steel production by 50% in the heating season.
  • Cuts for other targeted cities should be 30% or more.
  • Production of supporting sintering machines and coke ovens will also be cut accordingly.
  • Plants whose overall operations meet the ultra-low emission standards are exempt from staggered production.
  • Plants whose production meets part of the ultra-low standards will face staggered production.
  • All plants are required to cut production by 50% during heavy pollution.

 

Coking industry

  • Coking duration at coke plants in urban areas are required to be extended beyond 48 hours, and that of plants in other areas should be extended to over 36 hours.

 

  • Coking duration across all coke plants are required to be extended beyond 36 hours.
  • Coke plants with desulphurisation and denitrification facilities and emissions that meet standards are exempt from staggered production.

 

Casting industry

  • Except for electric furnaces and natural gas furnaces that meet emission standards, all other facilities are required to suspend in the heating season. In special cases, production only starts with approval from the municipal government.
  • Production of all electric furnaces and natural gas furnaces should be suspended during heavy pollution.

 

  • Except for electric furnaces and natural gas furnaces that meet emission standards, all the other casting and smelting facilities (including blast furnaces for pig iron casting) are required to suspend in the heating season. In special cases, production only starts with approval from the municipal government.
  • Production of all electric furnaces and natural gas furnaces should be suspended during heavy pollution.

 

Building materials industry

  • Increase the proportion of staggered cuts.
  • Full suspension is imposed across industries of cement, brick kiln, ceramics, glass wool, rock wool, and plaster tablet in the heating season.
  • Cement grinding plants are required to suspend in heavy pollution.

 

  • Increase the proportion of staggered cuts.
  • Except for plants in the list for staggered production (see column on the right), full suspension is imposed across industries of cement (excluding grinding plants), brick, ceramic, glass wool, rock wool, mineral wool, waterproof building materials, and plaster tablet in the heating season.
  • Glass plants are required to cut production in heavy pollution.
  • 2018: Little or no cuts are imposed on plants powered by natural gas, electricity, or power plant thermodynamic system.
  • This includes industries of casting, ceramic, brick, glass wool, plaster tablet, waterproof building materials, rock wool, and mineral wool.
  • For plants listed in the Industrial Structure Adjustment Guideline, there will be a greater cut or suspension.

 

Nonferrous metals and chemicals sector

  • Primary aluminium producers cut production by over 30%.
  • Alumina producers cut production by 30%.
  • Carbon producers whose emissions meet standards cut production by over 50%.
  • Carbon producers whose emissions did not meet standards suspended production.  
  • Melting and casting processes in the secondary metal production cut by half.
  • Pharmaceutical companies that produce active pharmaceutical ingredients (API) and pesticide companies that use organic solvents suspended production if they discharged VOCs.
  • Primary aluminium producers cut production by over 30%.
  • Alumina producers cut production by 30%.
  • Carbon producers cut production by half.
  • Melting and casting processes in the secondary metal production cut by half.
  • Pharmaceutical companies that produce active pharmaceutical ingredients (API) and pesticide companies that use organic solvents in production suspended production if they discharged VOCs.

 

Transportation beyond peak hours

  • Transport of raw materials and finished products across steel, coke, nonferrous metals, power, and chemicals should be conducted beyond peak hours.
  • Plants are highly encouraged to use freight vehicles with fewer exhaust emissions, such as those that meet the national IV and V emission standards.
  • Vehicles that meet the national IV and above emission standards are required to account for over 80% of the overall freight vehicles during the heating season.
  • During heavy pollution, delivery vehicles are banned from entering or leaving the ports across Circum-Bohai Sea region. This excludes the transportation of basic goods for daily use or special purposes.
  • Vehicles that meet the national IV and above standards will avoid the ban if they are moving foreign traded goods or international travellers.
  • Delivery vehicles, except for those that ensure production safety, are banned from entering or leaving the plants of key sectors.
  • Transport of raw materials and finished products across steel, construction materials, coke, nonferrous metals, chemicals and mining sectors should be conducted beyond peak hours.
  • Logistics distribution in urban areas, between urban areas and ports or between ports should also be conducted beyond peak hours.
  • If pollution exceeds the yellow-alert level, diesel vehicles, except for those that ensure production safety, are banned from entering or leaving the plants. This excludes the transportation of basic goods for daily use or special purposes.
  • Vehicles that meet the national V and above standards can avoid the ban if they are moving foreign traded goods or international travellers.

 

데이터 출처 설명: 공개 정보를 제외한 모든 데이터는 SMM이 공개 정보, 시장 커뮤니케이션 및 SMM 내부 데이터베이스 모델을 기반으로 가공한 것입니다. 본 자료는 참고용이며 의사결정 권고를 구성하지 않습니다.

문의 사항이 있거나 자세한 정보를 원하시면 아래로 연락해 주시기 바랍니다: lemonzhao@smm.cn
리서치 보고서 열람 방법에 대한 자세한 내용은 아래로 문의하시기 바랍니다:service.en@smm.cn
관련 뉴스
중동 상황이 계속 완화되고 위험 선호 심리가 반등하면서 구리 가격이 상승하고 있습니다 [SMM 구리 모닝 코멘트]
14분 전
중동 상황이 계속 완화되고 위험 선호 심리가 반등하면서 구리 가격이 상승하고 있습니다 [SMM 구리 모닝 코멘트]
더 보기
중동 상황이 계속 완화되고 위험 선호 심리가 반등하면서 구리 가격이 상승하고 있습니다 [SMM 구리 모닝 코멘트]
중동 상황이 계속 완화되고 위험 선호 심리가 반등하면서 구리 가격이 상승하고 있습니다 [SMM 구리 모닝 코멘트]
14분 전
잠비아 광업 확장, 투자 증가 속 인프라 문제 직면
7시간 전
잠비아 광업 확장, 투자 증가 속 인프라 문제 직면
더 보기
잠비아 광업 확장, 투자 증가 속 인프라 문제 직면
잠비아 광업 확장, 투자 증가 속 인프라 문제 직면
잠비아 광산업은 주요 글로벌 생산업체들이 정부의 연간 구리 생산량 100만 톤 목표에 맞춰 자본 지출을 확대하면서 대대적인 확장 국면에 접어들고 있다. 그러나 외신 보도에 따르면, 업계 분석가들은 장기 생산 목표 달성 여부가 전력망과 운송 인프라가 광산 설비 확장에 맞춰 확충될 수 있는지에 크게 좌우된다고 경고한다. 가장 큰 운영 제약은 카퍼벨트 지역의 전력 공급 여건이다. 잠비아의 총 발전 용량 3,985MW 중 83% 이상이 카푸에 협곡 및 카리바 노스와 같은 수력 발전 자산에 의존하고 있어, 최근 가뭄으로 인한 수위 하락으로 광산업 전반의 심각한 에너지 취약성이 드러났다. 예고 없는 계통 변동과 긴급 부하 차단은 에너지 집약적인 제련 공정에 치명적인 운영 위험을 초래하며, 정전으로 인한 급격한 열 충격은 구리 제련로 내화 벽돌 라이닝의 물리적 손상과 장기간의 가동 중단으로 이어진다. 광산 기업들은 이러한 차질을 완화하기 위해 계통 외 재생에너지 프로젝트, 유틸리티 규모의 태양광 설비, 주변국 전력 수입에 대한 투자를 늘리고 있다. 에너지 문제 외에도 지속적인 생산 증가를 위해서는 철도 물류 네트워크, 용수 인프라, 현지 공급업체의 기술 역량에 대한 자본 투자가 필요할 전망이다.
7시간 전
잠비아 선거: 투자자들, 경제 개혁 속 광업 성장과 정책 지속성에 주목
9시간 전
잠비아 선거: 투자자들, 경제 개혁 속 광업 성장과 정책 지속성에 주목
더 보기
잠비아 선거: 투자자들, 경제 개혁 속 광업 성장과 정책 지속성에 주목
잠비아 선거: 투자자들, 경제 개혁 속 광업 성장과 정책 지속성에 주목
잠비아가 총선을 준비하는 가운데, 해외 투자자와 금속 애널리스트들은 거시경제 정책의 지속성이 실질적인 광업 성장으로 이어질 수 있을지에 주목하고 있다고 외신이 보도했다. 시장의 주요 관심은 외국인 직접 투자 집행, 전력 부문의 신뢰성, 그리고 장기 생산 목표를 뒷받침할 구조적 경제 개혁에 쏠려 있다. 국가 경제의 중추로서 수출 수익의 70%와 GDP의 10% 이상을 창출하는 구리 부문은 기관 투자자들에게 여전히 가장 중요한 기준이다. 시장 참여자들은 First Quantum의 진행 중인 확장, Barrick의 지속적인 투자, Vedanta의 복귀 등 프로젝트 파이프라인이 실제 생산 증가로 이어져 국가 구리 생산량을 약 100만 톤에서 3배로 늘리는 장기 목표를 달성할 수 있을지 예의주시하고 있다. 정부는 광업 로열티 세율을 안정적으로 유지하겠다고 약속했지만, 광산 기업들이 3~4년에 걸쳐 국내 조달 비중을 20%에서 40%로 확대해야 하는 현지 조달 의무화 제도 때문에 외국 사업자들은 공급망 조정 압력에 직면할 수 있다. 현지 공급업체들이 필요한 자본과 기술 역량을 갖추지 못한 경우가 많기 때문에 외국 사업자들은 운영 병목 현상이나 규제 집행의 불확실성에 직면할 수 있다. 게다가 생산 확대는 심각한 가뭄으로 인한 순환 정전 사태 이후 태양광 투자와 전력망 개혁을 통해 수력 의존형 전력망의 취약성을 해결하는 데 달려 있다. 투자자들은 또한 지난 1월 종료된 17억 달러 규모의 이전 금융 지원 이후 후속 IMF 프로그램 협상과, 정부의 옥수수 완충 재고 매입과 연계된 재정 적자 위험도 주시하고 있다.
9시간 전
Analysis of production cuts in winter season 2018-2019 - Shanghai Metals Market (SMM)