China's top steelmaking hub Tangshan orders production cuts; prices fall

Tangshan city government has asked local steelmakers to slow operations at sintering and pellet plants and lower the utilization of pig iron and steel making capacity, according to the sources.

Six blast furnaces, with a combined capacity of 6.9 million mt/year will be suspended during the period, the sources said, adding that such output cuts typically last for a week. The curbs will be lifted once air quality improves.

The adverse impact on Tangshan's overall steel production was relatively small, some market sources said, as its utilization of pig iron and steel making capacity was already reduced significantly by earlier government orders.

The average utilization rate of Tangshan pig iron and steel production capacity was cut to about 60% in the second quarter in compliance with Tangshan city government's March orders to clear air pollution in the city, the sources said. The cuts rose to about 65% in July.

Tangshan's output in the first eight months of 2021 reached 84.76 million mt, or 348,800 mt/day, down 11% on the year, data from its statistics bureau showed.