China is expected to slash in half the rate of steel production in Tangshan, a city in the north-east that produces 11 per cent of the country’s total output. The reduction is aimed at diminishing winter pollution from plants that process coking coal, a crucial ingredient in the steelmaking process.
At the same time, the Chinese government said that producers would also be mandated to reduce overall coking coal production by 30 per cent. The directive comes in a moment when coking coal prices showed a downward trend of more than 5 per cent.
Similarly, prices for low-grade iron ore, another key component for steel, have plunged more than 18 per cent in the past month.
The Tangshan cut will affect 20m metric tonnes of steel or 7.5 per cent of national annual production. Other key steel-producing cities such as Shijiazhuang, Anyang and Handan are expected to announce similar cuts.
These reductions are part of a series of suspensions in China’s Rust Belt that will take effect within the next few months as environmental authorities strive to meet their promise to lower the concentration of particulate matter by 22 per cent this winter.
According to the Financial Times, China’s Ministry of Environmental Protection has also scheduled a round of plant inspections in Beijing, Tianjin and 26 other cities to enforce more stringent emissions guidelines.