SHANGHAI, May 6 (SMM) — This is a roundup of news in the steel industry for last week.

Tangshan eliminated 6.05 million mt of steelmaking capacity and 4.42 million mt of iron-making capacity in 2020

Tangshan completed the task of iron and steel capacity reduction last year by eliminating 6.05 million mt of steelmaking capacity and 4.42 million mt of iron-making capacity, according to the "2020 Tangshan Metallurgical Industry Yearbook”.

Tangshan eliminated 39.38 million mt of steelmaking capacity and 26.35 million mt of iron-making capacity during the "13th Five-Year Plan" period, which accounted for 48% of its total iron and steel capacity. The number of steel companies in Tangshan has been reduced from 44 at the end of 2015 to 30.

Shandong Iron & Steel Group Yongfeng Zibo to complete closure by April 30

Shandong Iron & Steel Group Yongfeng Zibo plans to close one 1,350 m³ blast furnace and two 120 mt converters, with a total iron-making capacity of 1.22 million mt and steelmaking capacity of 2.7 million mt. Various equipment began to be shut down from April 24 before a full closure on April 30.

Tariffs on some steel products to be adjusted to support crude steel output reduction

The Customs Tariff Commission of the State Council announced that tariffs on certain steel products will be adjusted from May 1, 2021. Provisional tariffs, which are generally set annually, refer to more preferential tariff rates for certain import and export products on top of the preferential import tariff rates and export tariff rates stipulated under customs import and export tariff rules. According to the announcement, zero provisional import tariffs will be imposed on pig iron, crude steel, recycled steel raw materials, and ferrochrome. Export tariffs on ferrosilicon, ferrochrome, and high-purity pig iron will be raised appropriately. After the adjustment, ferrosilicon will be subject to a 25% export tariff, while ferrochrome and and high-purity pig iron will be subject to a provisional export tariff of 20% and 15% respectively.

SMM believes that the zero import tariffs on recycled steel raw materials, namely steel scrap, will guide steel mills to increase the ratio of steel scrap, reduce dependence on imported iron ore, guide the steel industry to reduce total energy consumption, and suppress iron ore prices to a certain extent. The zero import tariffs on pig iron and crude steel will be conducive to the reduction of crude steel production in the long run, but may do little to drive overseas pig iron and crude steel to flow into China in the short term as overseas steel prices are much higher than those in the domestic market.