Steel Mills Faces Higher Costs to Meet Environmental Standards
Three quarters of China’s steel mills are already struggling due to a weak demand are now facing higher costs along with the risk of punishment as many of them do not meet environmental standards and as a result of tougher environmental legislation that recently came to effect. These steel enterprises are also in pressure to upgrade and according to the Iron and Steel Association of China, the cost of complying with the upgrade has risen to 50 percent.
Chinese third biggest steel producer Shagang Group iron ore division said that they are not using any of the company facilities are not being used to avoid braking the rules until its renovated after the Chinese New Year. The cost of compliance is around 160 yuan per ton of steel placing further pressure in a sector that is already suffering from low prices as of the result of over capacity and a economic slowdown.
Last year the environmental compliance costs these Chinese steel mills 55 yuan per ton and State own steel mills are paying double. The steel sector in China is one of the world’s biggest has been a primary target to clean up the air especially in Hebei the country’s smoggiest province.