China Bans 11 Steel Mills from Operations, Issues Warning to 17 Others

According to latest reports, today China’s industry ministry said that it would remove 11 steel firms from a list of qualified enterprises, effectively banning them from operating, and ordered another 17 to rectify environmental, safety and other breaches or face the same fate.

The list of 11 disqualified mills, includes Xuzhou Dongya Iron and Steel and Guangdong Century Tsingshan Nickel Industry Co, which were identified by the Ministry of Industry and Information Technology (MIIT) as having illegally added new capacity, although being under bankruptcy liquidation processes or failing to obtain operating licenses from the local government.

The companies have time until Jan. 16, 2019, to register any objections to being removed from the list; otherwise, they will be banned from operating after that date.

Meanwhile, 17 companies including Jiangsu Shagang Group , a unit of top steel producer China Baowu Group, and HBIS Group's subsidiary in key steel hub Handan, will be given a limited, though unspecified, time to rectify problems uncovered that relate to safety, environmental and the capacity cutting mission, the MIIT said.

This action from China’s MIIT has come as the country aims to streamline its steel sector which is dealing with excess capacity (around 908 MnT at present) as well as also to improve its overall operating efficiency and control rising pollution levels.

In the past three years, China has removed 48 steel mills from the list of qualified enterprises, reducing the total number of registered steelmaking companies to 256, the ministry said in a statement.

However, the ministry plans to add 12 new companies in China's western and southern regions to the list of qualified enterprises, with a total ironmaking capacity of 21.86 MnT and steelmaking capacity of 22.12 MnT.