SHANGHAI- China will completely eliminate the production of a highly-polluting kind of low-end steel product by the end of June as part of its efforts to tackle smog, state media reported, citing a meeting of China’s steel association.
According to the official China Securities Journal, China Iron and Steel Association (CISA) chairman Ma Guoqiang said the central government has already decided to launch a tougher crackdown on the product, and will make sure that all production capacity is shut down before the end of June this year.
The low-grade steel produced in small low-tech furnaces, often using recycled material, has been identified as not only as a source of pollution but also a major safety hazard.
Production of this low-grade steel has continued even though it has long been banned by China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).
Last month, China’s cabinet reprimanded Jiangsu province vice-governor Ma Qiulin after an inspection found as many as 63 firms were still producing the low-grade steel in the region, with total annual capacity as high as 12.33 million tons.
China has launched a campaign to shut down substandard steel production as part of its war on pollution and industrial overcapacity. It is planning to close 100-150 million tons of annual steel production capacity over the 2016-2020 period.
China is actively taking measures to cut steel capacity and is looking to strengthen talks with other countries to solve steel trade disputes, China’s commerce ministry said on Tuesday.
China’s steel industry, the world’s biggest, has been blamed by overseas steel mills for causing them hurt by exporting indiscriminately at unfair prices.
The nation is expected by analysts to ship a record 100 million tonnes-plus of steel products abroad this year to offset shrinking domestic demand amid a slowing economy.
“The overcapacity is a common issue facing the global steel industry which is under restructuring. China is actively taking measures and optimising the industry structure, including slashing large capacities,” Shen Danyang, spokesman for the Ministry of Commerce, told reporters at a briefing.
Chronic overcapacity and falling demand has helped drive Chinese steel prices to their lowest level in decades, forcing domestic mills to cut output and some to shut down permanently due to heavy losses and debt. – Reuters