Steel over­ca­pac­ity re­duc­tion tar­gets are raised for 2014

China Daily (Canada) - - BUSINESS - By DUJUAN dujuan@chi­

In a new push to fight pol­lu­tion and ac­cel­er­ate in­dus­trial up­grad­ing, Chi­nese au­thor­i­ties have upped the tar­get erad­i­ca­tion of out­dated steel pro­duc­tion ca­pac­ity to 28.7 mil­lion met­ric tons. The Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy an­nounced new ob­so­lete ca­pac­ity re­duc­tion tar­gets on its web­site on Thurs­day.

Com­pared with num­bers re­leased in a March govern­ment re­port de­liv­ered by Pre­mier Li Ke­qiang, the newgoal is 1.7 mil­lion tons higher.

Zhang Tieshan, a se­nior an­a­lyst from in­dus­trial in­for­ma­tion provider Mys­, said Bei­jing faces such se­ri­ous en­vi­ron­men­tal prob­lems that poli­cies to elim­i­nate ob­so­lete steel mills had to be re­vised.

He­bei prov­ince is the big­gest steel pro­ducer in China with an an­nual ca­pac­ity of more than 200 mil­lion tons. It ac­counts for quar­ter of the na­tional ca­pac­ity.

Ac­cord­ing to the State Coun­cil’s plan, China will elim­i­nate 80 mil­lion tons of out­dated steel ca­pac­ity by 2017.

Of that, He­bei was re­quired to cut 60 mil­lion tons.

“A num­ber of small steel mills were shut down re­cently un­der the ad­min­is­tra­tive or­der,” said Zhang. “The lo­cal govern­ment has taken ac­tions to reach the goal.”

He noted that wa­ter is also an is­sue for Bei­jing’s en­vi­ron­men­tal

a pro­tec­tion and that steel mills are large wa­ter con­sumers.

Ac­cord­ing to the lo­cal govern­ment, be­tween 2011 and last Oc­to­ber, He­bei pulled down 10 blast fur­naces and 16 con­vert­ers be­long­ing to eight com­pa­nies, which has re­duced steel smelt­ing ca­pac­ity by 6.8 mil­lion tons and iron smelt­ing ca­pac­ity by 4.56 mil­lion tons.

This Fe­bru­ary, the prov­ince took down an­other 16 blast fur­naces, cut­ting steel ca­pac­ity by an­other 1.49 mil­lion tons.

The min­istry also

an­nounced that the coun­try will shut down 50.5mil­lion tons of ce­ment ca­pac­ity this year, higher than the 42 mil­lion ton goal an­nounced in­March.

Mean­while, China plans to elim­i­nate 420,000 tons of alu­minum ca­pac­ity and 512,000 tons of cop­per pro­duc­tion ca­pac­ity by the end of this year.

To help small com­pa­nies that must shut down, the govern­ment will pro­vide sub­si­dies for staff set­tle­ment, the Min­istry of Fi­nance an­nounced onWed­nes­day.

Seven in­dus­tries — namely, steel, non­fer­rous metals, con­struc­tion, man­u­fac­tur­ing, petro­chem­i­cal, light in­dus­try and tex­tiles — will be the ma­jor ben­e­fi­cia­ries of the sub­si­dies, ac­cord­ing to the min­istry.

Uti­liza­tion rates in steel, alu­minum, ce­ment and ship­build­ing are all be­low 75 per­cent, the in­dus­trial min­istry an­nounced at a news con­fer­ence last month.

It said that in March, prices of do­mes­tic in­dus­trial prod­ucts had been fall­ing for 25 con­sec­u­tive months.

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