China Hebei's May steel output drops as pollution pressures mount

Fri Jun 20, 2014 12:56am EDT

BEIJING, June 20 (Reuters) - Steel production in northern
China's Hebei fell 3 percent in May from a year ago, compared to
a 2.6 percent increase nationwide, with the top steelmaking
province bearing the brunt of a campaign to shut down polluting
industrial capacity.
    Hebei was home to seven of China's 10 smoggiest cities in
2013, according to official air quality data, and has been under
heavy pressure to clean up its economy and ease its dependence
on polluting industries like steel and cement.
    Hebei produced 16.36 million tonnes of steel in May, up 1.1
percent compared to April, but its share of the total fell to
23.2 percent from 23.5 percent in the previous month, according
to data from the National Bureau of Statistics.   
    Over the first five months of the year, Hebei produced 82.95
million tonnes, 24.2 percent of the total and 3.8 percent lower
than the same period of 2013.
    Hebei, which surrounds the capital Beijing, has been the
major front in a "war on pollution" that has targeted
small-scale industrial plants, including hundreds of
privately-owned steel mills.
    Hebei's massive and poorly regulated private steel sector
has been blamed for much of the hazardous particulate matter
drifting into Beijing. 
    The national government is expected to publish a detailed
new integrated pollution action plan for the
Beijing-Hebei-Tianjin region in the coming weeks, which could
put steel mills under even more pressure to clean up.
    Hebei has already vowed to cut crude steel capacity by 60
million tonnes over the 2014-2017 period, with 15 million tonnes
to be closed this year, but some officials expect the actual
figure to be higher, with many mills struggling to survive a
crisis brought about by oversupply and sliding prices.
    Following is a table showing China's biggest steel producing
provinces in May and the first five months of the year,
according to the National Bureau of Statistics.
 Province      May     pct chg    share of   Jan-May    pct chg 
           output*       (yoy)   total (%)   output*  
    Hebei    16.36        -3.0        23.2     82.95        -3.8
  Jiangsu     7.88         5.3        11.2     39.39         8.2
 Liaoning     5.50         7.5         7.8     26.85         9.2
 Shandong     5.51        -2.2         7.8     26.57         0.2
   Shanxi     3.94        -0.5         5.6     18.48         0.0
    China    70.43         2.6         100    342.52         2.7
    total                                             
 * Figures in million tonnes 

 (Reporting by David Stanway; Editing by Muralikumar
Anantharaman)
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