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[SMM Iron and Steel Analysis] if "production restriction" wants to fill the building, what is the impact of multi-land production restriction?
Jul 22,2019 19:06CST
The content below was translated by Tencent automatically for reference.


Recently, Tangshan environmental protection production restrictions again issued a new policy, and during this period, a number of steel plant managers who have not been implemented in place have been "invited to tea" one after another, it can be seen that the production restrictions do continue to be strict, but the specific impact, SMM carried out in-depth follow-up. The specific conditions are as follows: as can be seen from the production restriction documents, the new environmental protection and production restriction policy is mainly for sintering new production restrictions and non-coastal steel mills during the ecological conference from July 26 to July 28. Among them, according to the estimation of SMM strictly according to the documents, the new production limit of sintering has an impact on iron ore demand of 6.8561 million tons, compared with the previous round of production limit of + 689600 tons; during the meeting, the influence of the furnace on hot metal is 3.731 million tons, compared with the previous round of production limit of + 145800 tons; crude steel impact of 3.7947 million tons, compared with the previous round of production limit of + 123600 tons. However, it is worth noting that according to research feedback, most steel mills have conventional stocks, so the actual impact on iron ore demand may be reduced. In addition, there is still considerable uncertainty about the implementation of the furnace during the meeting, so the specific amount of impact has yet to be followed up. A comparison of the specific production restrictions is shown in the following table:

At a time when Tangshan production restrictions are spreading and becoming more and more intense, other areas are also "unwilling to lag behind", and the news of "environmental protection and production restrictions" is flying all over the world.

Among them, the Handan area issued an emergency notice on 19 July 2019, from 20.00 to 26 July 2019, to strengthen the control measures for the prevention and control of air pollution in and around the main urban area, and stipulated that on the basis of the original production restriction policy, the sintering machines allowed to be produced by iron and steel enterprises shall be suspended from 20:00 to 8:00 the next day, among them, Wu'an City, which is the "concentrated place" of most steel enterprises in Handan City, Compared with the last production limit document to increase the sintering impact of 289200 tons (according to SMM estimates, if all relevant steel enterprises in Wu'an City strictly follow the document, this document is expected to affect sintering capacity of 5.4497 million tons, pig iron capacity of 2.0453 million tons). According to SMM research, local steel enterprises more feedback has been in accordance with the policy provisions of the implementation of production restrictions;

On the 18th, Linyi, Shandong Province, issued the "Program for strengthening the Prevention and Control of Air pollution in Linyi City," which requires that bulk coal pollution control, dust and oil fume pollution control, heavy pollution enterprises return to the park, industrial pollution sources, steel market relocation, motor vehicle pollution prevention and control, especially in the iron and steel industry, it is required to strengthen the renovation of plate enterprises, if the formalities are not complete and the pollution control facilities are not perfect, stop production. By the end of October, the implementation of iron and steel (8) ultra-low emissions transformation, overdue stop production treatment. In addition, there are even market rumors that "from the end of July to the National Day, Shandong iron and steel enterprises limit production by 30%." According to the SMM survey, at present, the restrictions on iron and steel enterprises in Linyi have not been implemented on the specific time and equipment as in Tangshan, Hebei, and other areas. I am afraid that the specific situation will not be clear until October. In addition to Linyi, the relevant enterprises in other areas in Shandong have not received the official news about the shutdown, and the general feedback from iron and steel enterprises is still in a normal state of production.

Since late June, the news of environmental protection and production restrictions in various parts of the market, such as the tide, has never stopped. However, under SMM research, in addition to the strict implementation of policies in Tangshan and Handan, no policies have been issued or have not been clearly implemented in other areas, and the impact on steel supply is not very clear, but the mountain and rain is about to come into full swing. At present, the release and implementation of production restrictions policies in other areas can still be expected. Follow-up status SMM will continue to track.





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