Tangshan introduced several environmental protection policies

SHANGHAI, Mar 4 (SMM) — After the CNY, Tangshan introduced several environmental protection policies.

1. Tangshan has issued a total of three emergency responses to severely polluted weather since the CNY, and two of them have been strictly controlled on the basis of Level II responses.

According to SMM survey, the main impact of this round of heavy-polluted weather emergency response policy on Tangshan steel market lied in the production of the billet rolling mill and the strict restrictions on overall transportation. The actual blast furnace production basically remained normal. The strict restrictions on transportation have caused great obstacles to the circulation of steel products in Tangshan. The transfer of in-plant stocks to social stocks was not smooth, and the port’s transportation and port congestion capacity also declined significantly. Tangshan issued the "Emergency Notice of Suspension of Port Transportation" on the afternoon of March 3, which required that port transportation should be stopped from 20:00 on March 3 to 8:00 on March 6, and vehicles should be turned off in place. Under the influence of a series of policies, the transportation of steel from North China to South China will be more difficult, and the supply pressure in the northern market is expected to increase significantly.

2. While the daily air quality forecast and control are tightened, the March plan for the comprehensive treatment of air pollution is released.

On March 2, Tangshan issued a plan for the comprehensive treatment of air pollution in March, which included a special event for eliminating outdated equipment and production capacity and other related policies directly hit the steel industry. Before March 10, seven 450m³ blast furnace of Yanshan Iron and Steel, Tangshan Iron and Steel, Huaxi Iron and Steel, and Rongxin Iron and Steel will be shut down. Before March 10, all production equipment of Xinbaotai Iron and Steel will be shut down. In March, the expected reduction in steel supply in Tangshan City quickly expanded in the steel market. In the night trading of March 2, ferrous metals generally rose sharply. The main HRC contract closed at 5,026 yuan/mt on March 3, hitting a record high.

SMM conducted a comprehensive investigation and calculation of the implementation of the plan for the comprehensive treatment of air pollution in March and the expected impact:

According to SMM survey, as of March 3, among the five steel mills named in the document, only the two blast furnaces of Huaxi Iron and Steel had stopped production before the CNY, and production has not yet resumed. The remaining steel mill equipment has been temporarily in normal operation, some steel mills may plan to suspend production next week, or have not made a specific shutdown plan for the time being. SMM will continue to track the follow-up situation.

According to SMM calculations, if all the five 450m³ blast furnaces currently in production and the one 630m³ blast furnace currently in production at XBT Steel stop production, the corresponding molten iron reduction will be about 9,500 mt/day.

It is worth noting that the blast furnaces eliminated in this round have already involved capacity replacement, and the corresponding new replacement capacity will basically be put into operation within half a year. In March, if the 1250m³ blast furnace of Yanshan Iron and Steel is put into operation, together with the 2922m³ blast furnace of Laoting Iron and Steel and the 2300m³ blast furnace of Donghua Iron and Steel planned to be put into operation in March, the molten iron will increase by about 15,300 mt/day. The actual supply of molten iron in the future may increase.

3. Tangshan will implement total control and emission reduction of air pollutants in key industries, and the annual emission reduction target will be released soon.

On February 27, 2021, the public account "Ecological Tangshan Micro Release" issued an article “Another new measure for pollution control at the source will be launched soon! ——Tangshan will implement the total amount of air pollutants in key industries to control and reduce emissions. There are something companies have to understand! ”

SMM believes that according to the emission reduction plan of "pollutants reducing by more than 40% compared to 2020 emissions", the production emissions of steel plants in Tangshan City this year will face more stringent regulation than in previous years. Phased shutdowns and restrictions on production and the upgrade of equipment in terms of energy saving and emission reduction will continue throughout the year.

4. Summary

The recent frequent environmental protection actions of Tangshan City demonstrate the determination of the Tangshan City Government to protect the environment and strengthen energy conservation and emission reduction in 2021. It will inevitably have an impact on the overall steel market. However, from the current implementation of the “heavy pollution weather emergency policy” and the “March Plan for Comprehensive Pollution Control”, the actual reduction in the supply of molten iron is limited, which has a more obvious impact on market sentiment and inter-regional resource supply.

In the long run, considering the determination of the Ministry of Industry and Information Technology to resolutely reduce the production capacity of crude steel this year and the goal of total air pollutant reduction in key industries in Tangshan City, Tangshan steel market is likely to have a series of policies in 2021, while SMM will continue to track whether the implementation of upstream and downstream policies can be unified.