NDRC to Seriously Curb Steel Production in Three Provinces with Dual Control Policies

SHANGHAI, Sep 14 (SMM) – The recent dual control policy for energy consumption has exerted a significant impact on the production of iron and steel enterprises in many provinces. According to SMM survey, the energy consumption has expanded in H1 2021 in nine provinces (regions), including Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi, and Jiangsu. Energy consumption control in these regions may be strengthened in September. SMM will continue to track the production of steel mills.

Yunnan Provincial Development and Reform Commission issued a dual-control work plan for energy consumption on September 11 to adjust the production of steel enterprises in the province. The production curtailment in crude steel output in Yunnan is expected to be more significant than expected in September. According to the Bureau of Statistics, the crude steel output in Yunnan from January to July this year increased by 2.79 million mt or 22.8% on the year. Since the total output in 2021 is stimulated to be no higher than that in 2020, the maximum average daily output from August to December will be approximately 48,680 mt, 22,880 mt lower than the average daily output from January to July.

Wuhan Municipal Government issued the "Wuhan City's Work Plan for Promoting Carbon Reduction and the Development of Low-Carbon Industries", requesting to further deepen the national low-carbon city pilot demonstration in Wuhan and increase energy-saving and carbon-reduction technology transformation in traditional industries such as steel, electric power, petrochemicals, and building materials. The scale of new production capacity should be strictly controlled in the heavy chemical industry, and the production of crude steel should not increase. Steel makers must raise the application ratio of steel scrap in the production. By 2025, the amount ratio of iron to steel will fall below 0.75.

The production lines in Anning Headquarters of Kunming Iron & Steel will stop production on September 28. The capacity of Anning headquarters will be transferred to Caopu New Area, which is expected to be commissioned in December 2021. The average daily output will be reduced by around 4,200 mt from September 28 to November.