Hebei steel sector pressured by severe environmental protection situation

Mar 03, 2015  11:08:29

It is learned from Hebei Metallurgical Trade Association that both crude steel output and pig iron output of Hebei province posted negative growth for the first time since 2014, with steel output growing marginally. Economic benefit of the overall industry turned around, but profitability was relatively low. 

Data from Hebei Metallurgical Trade Association showed profit of per tonne steel of Hebei steel industry came at 113.24 yuan/tonne in 2014, with sales margin at 1.87%. 

"Entering 2015, Hebei steel industry still faces overcapacity, soft demand, low prices, intense competition as well as differentiation of enterprises.”Wang Dayong, vice chairman of Hebei Metallurgical Trade Association expressed. At the beginning of 2015, Hebei province put forward target of eliminating 5mln tonnes of crude steel capacity in the year. Besides, the implementation of new environmental law imposes great pressure on steel enterprises. 

 On Dec, 2014, Hebei province again took strong measures to strengthen pollution control, stating to lift pollutant discharge fees like exhaust gas and polluted water by 2.5 times from 2015, which, according to analysts, suggests production costs of steel enterprises in Hebei province will be again hiked, exerting greater environmental pressure on mills.

"Since 2015, the most stringent ever environmental law has been implemented and strict enforcement will drive out those steel mills that are unable to bear increasing environmental protection costs.” An industry insider said.

Meanwhile, Hebei province will accelerate structural adjustment of steel industry as well as industry upgrading. At present, the number of mills that are qualified for steel smelting has been reduced to 112 from 148 in 2012. It is expected mills will speed up restructuring pace this year.

-Edited by www.mysteel.net