Is China going to Ban Expansion of New Steel Projects in 2019?

According to the latest reports, China’s industry minister in an interview said that the country “will strictly prohibit” the expansion of new iron and steel projects in 2019.

Miao Wei, Minister of Industry and Information Technology, said the capacity expansion ban would also apply to the cement and flat-glass industries, which were already subject to restrictions in 2018, while newly added primary aluminium capacity would continue to be "strictly controlled".

Although it is not clear what does the ‘New Project’ exactly mean but the country is clamping down on new industrial capacity built without the necessary approvals in an attempt to fight rising pollution and have clearer skies.

China has set a steel capacity cut target of 150 MnT for five years starting from 2016-2020. But the country has pre-achieved its target two years earlier. China has a total capacity of around 900 MnT in 2018.

In Jun’18, the State Council, China's cabinet, said that it would ban new capacity for steel, coke and primary aluminium in some key areas, including the Beijing-Tianjin-Hebei and Yangtze River Delta regions, but Miao did not say anything if the ban he mentioned would have limited geographical scope.

China’s steel production to increase in 2020

As per IC Carbon, a large number of new projects (about 152) which are part of country’s ‘Steel capacity replacement plan’ will be put into production in China in 2019 and after two years of the upgrade, retreatment, and relocation, the country’s steel production will increase in 2020.

Some of the key capacity additions expected in 2019 are:

• Xinjiang Fuxin Iron and Steel – Haohang Special Steel Co Ltd will put into operation 50 tonnes of the electric furnace by Feb’19.

• Tangshan Donghua Iron and Steel Company is expected to put into production 1.2 MnT of hot-rolled mill plant by Apr’19.

• The construction work of Tangshan Ganglu Steel 2 MnT cold-rolled steel mill has been completed and the plant will be put into operation in 2019.

• The second batch of the first phase of Shansteel Rizhao Company of 4 MnT capacity will be put into operation by 2019.

• The 75 tonnes of Shaanxi Hanzhong Iron and Steel Group Co Ltd is expected to be put into operation in October 2019 and has started construction.

• Fujian Dingsheng Iron and Steel Co. Ltd’s 1.15 MnT electric furnace will be put into operation in September 2019.

source: SteelMint