Steel mills in Shandong face one month cut over SCO Summit

SHANGHAI, May 21 (SMM) – Shandong's industrial production will face a series of restrictions in the following month as Shanghai Cooperation Organisation (SCO) Summit will be held in Qingdao on June 9. 

From May 20 to June 20, construction sites within 100 km of Qingdao will be completely suspended; steel plants within 300 km of the city have been required to cut 40-50% of their blast furnace output, SMM learned. 

As of Monday May 21, Jinan city has stopped steel product deliveries to Qingdao.

Shandong Juneng Special Steel is putting one of its 450m³ furnaces under maintenance, which is expected to end in late June. This is set to affect an average monthly output of 40,000 mt of molten iron and 10,000 mt of steel bar products. Steel bars refer to products with a diametre over 12mm.

Shandong Fulun Steel plans to conduct maintenance of 20-30 days at its bar production lines in late May. This is expected to affect output of 2,000 mt of steel bar per day.

Maintenance works will also be seen at one of Shandong Luli Steel’s 1080m³ furnaces later this month. It is estimated to last for a month and affect 3,000 mt of steel products per day. The start date remains unclear. 

Local trucks are required to obtain a pass to enter the districts of South City, North City, Licang, Laoshan, and Chengyang of Qingdao. Trucks from other provinces will be denied entry. However, ore vessels at Qingdao port are allowed to conduct normal operations. 

Daily average volumes delivered from ports last week rose 95,000 mt week on week to stand at 2.54 million mt. Qingdao port saw an increase in its daily average departing volumes as steel mills in Shandong purchased actively over the past week.

Separately, to further improve air quality, China aims to overhaul bulk freight transport arriving or leaving ports in the Beijing-Tianjin-Hebei region from road to rail by the end of 2019, the Ministry of Ecology and Environment said in an April release. The Yangtze River Delta region and their nearby areas were also included in the measure.

The move covers freight of iron ore, steel and coke.

Copper smelters in the region told SMM their production will remain unaffected, but downstream companies in Qingdao are subject to traffic control during June 6-12.

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