Steel Producers to See More Shutdowns as Government Increases Efforts in Controlling Pollution
Steel producers in china might be facing the possibility of more shutdowns by next year as the government increases its efforts in controlling air pollution. Even with the closures in Hebei Province has restricted the production to several key producing regions as for the moment.
The closure order that was implemented last week closed down several facilities in Wu’an city in southern Hebei to curb its power use has stoked worries in the steel output that pushed the Shanghai rebar to a 11 week high. Although the prices have come out around 2 percent off since its expectations on the closure will only last for two weeks. The latest efforts to combat pollution is different from the country’s 2010 campaign when the mills in Hebei, Henan and Shandong provinces was ordered to cut its output in September as the government was rushing to meet its target of five year energy efficiency Hebei province produces a quarter of the country’s crude steel that hit a record high of 716 million tons last year and is expected to hit 780 million tons this year.
The latest drive is part of China’s efforts to combat pollution, unlike a 2010 campaign when mills in Hebei, Shandong and Henan provinces were ordered to slash output from September as the Central Government raced to meet a five-year energy efficiency target. But the output will be hit next year as china is strictly enforcing more pollution control and center its attention on industries such as steel since there is an estimated overcapacity of more than 200 tons.