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[SMM Iron and Steel Analysis] Tangshan Environmental Protection and production restriction tracking-Local relaxation is difficult to "pry" the overall situation strictly as a whole
Jul 15,2019 17:37CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

The middle of July is coming, does Tangshan environmental protection limit production really relax as stated in the document? SMM conducted a comprehensive follow-up investigation.

According to the limited production documents, Shougang, Wenfeng, Tianzhu, Huaxi and other steel mills can resume production from July 15 to July 31, but investigation feedback shows that Shougang is in a normal production state from beginning to end, so the resumption of production mentioned in this document has no impact. And Wenfeng, Tianzhu, Huaxi and other steel plants located in coastal areas and environmental protection standards do resume production, but the overall production capacity is relatively small (estimated by SMM data, this resumption leads to an increase of 8900 tons / day of hot metal, including 3600 tons of strip steel, 800 tons of plate, 700 tons of building materials and 3800 tons of other steel), which is not enough to have a greater impact. And mainly because, in the later stage, some inland steel mills moved to the coastal areas, which will affect the production of steel mills in coastal areas, so the government temporarily allowed some steel mills to resume production in order to hedge the impact of late relocation on the production of such steel mills.

 

Therefore, on the whole, although the local production restrictions have been relaxed due to special factors, the Tangshan environmental protection and production restrictions have been tightened as a whole, coupled with the approach of the National Day parade on October 1, the air quality problem from August to September will be concerned by the government, so the late stage of the production restrictions may continue to be strict.

 

The specific feedback of the steel mills is as follows:

A steel mill: at present, the policy of limiting production by 50 per cent is still strictly implemented. The planned output of 320000 tons in July is 38.5 per cent lower than the planned output of 520000 tons in June, and the amount of agreement is 30 per cent discounted. The steel mill believes that the current air pollution index is still at the bottom, and if it has not been improved, the production restrictions may continue to be strict in the later period.

 

B steel mill: at present, the policy of limiting production by 50% is still strictly implemented. Due to the basic price-locking model, there is no planned production per month, but the number of orders received in July is significantly reduced.

 

C steel plant: at present, the policy of limiting production by 50% is still strictly implemented, and the planned output of all varieties has been reduced in July, in which the hot rolling production line is still in the commissioning stage, so the reduction is not obvious. And steel mills believe that as the time from the parade is getting closer and closer, the government attaches great importance to it, so it is expected that during this period, it may be difficult to relax the production restrictions of steel mills, but during this period, the production restrictions of various steel mills may be adjusted. We also need to pay attention to whether there will be a new policy release at the end of July.

 

D steel mill: at present, the policy of restricting production by 20 per cent is still strictly implemented. The planned output of 560000 tons in July is 15.2 per cent lower than the planned output of 660000 tons in June, and the amount of the agreement is 40 per cent discounted. The specific time for resumption of production has yet to be determined. [SMM Steel]

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