SHANGHAI, Dec. 12 (SMM) – SMM surveys steel mills in Tangshan, Hebei Province after latest inspections on local intermediate frequency mills, and finds the following insights.
Tangshan’s government has required to shut down all intermediate frequency furnaces following severe haze days recently. Mills, having environmental licenses and producing no construction steel products, will be allowed to resume production after passing inspections.
SMM survey finds that most of intermediate frequency furnaces remain online in the region, but some have received the notice to stop production from December 15, and SMM will continue following the latest development.
The latest checks on intermediate frequency furnaces will reduce steel supply, and this will also promote mills with blast furnaces to increase production to fill the supply decline, and will grow demand for iron ore and coke.
Meanwhile, output suspension at intermediate frequency furnaces will reduce demand for scrap steel, and this will weigh down scrap steel prices. When scrap steel prices are more cost-efficient that iron water, blast furnace mills will increase purchases of scrap steel. SMM learns that some mills have already increased scrap steel purchases.
In other news, the inspections on Anfeng Steel have triggered checks on blast furnace mills with no relevant licenses in Tangshan, but the enforcement is not strong.