China mulls radical output cuts, port coal ban in war on smog

2017-02-14 09:11:00 Policy sxcoal.com

China is considering forcing steel and aluminum producers to cut more output, banning coal in one of the country's top ports and shutting some fertilizer and drug plants as Beijing intensifies its war on smog, Reuters reported on February 13, citing a draft policy document.


The Ministry of Environmental Protection (MEP) has proposed the measures in the document. If implemented, they would be some of the most radical steps so far to tackle air quality in the country's most polluted cities.


The move comes after China's northeast has battled some of the worst pollution in years as emissions from heavy industry, coal burning in winter and increased transport have left major cities including Beijing blanketed in thick smog.


The document outlines plans to cut steel and fertilizer capacity by at least half and aluminum capacity by at least 30% in 28 cities across five regions from around late November to late February.


By July, it would stop Tianjin, one of the nation's busiest ports, handling coal, with shipments diverted to Tangshan, 130 kms (80 miles) to the north, which would shift large volumes of coal transport from trucks to rail.


Tianjin, China's second largest by cargo volume, is the key hub for trading 100 million tonnes a year of seaborne coal and domestic coal that flows south from Inner Mongolia, the report said.


By September, ports in Hebei province would not be allowed to use trucks to carry coal from railways to ships.


Based on the cuts over three months, the measures would reduce China's total annual steel output by 8% annually and aluminum output by 17%t, according to calculations.


A source said the environmental watchdog has distributed the draft to relevant local governments and companies seeking reaction. It's not known when the Ministry expects to decide on whether to implement the plan, one of the most extreme since the government launched its offensive on pollution three years ago.


If introduced, the steps would likely further support rallies in aluminum, steel and coal prices, which have been buoyed by China's efforts to shut excess capacity and clean up polluting sectors.


Highlighting the difficulties enforcing that policy, Greenpeace said that China's operational steel capacity actually rose in 2016 after a high-profile closure program concentrated on already idled plants.


Still, prolonged cuts in capacity will reignite worries about demand for raw materials like iron ore and coking coal.


The steps will also cause major upheaval for utilities, miners and traders, as they seek alternative routes and storage for their coal.


The plans go further than an earlier proposal by Beijing's regional environmental watchdog to ban coal trucks and storage in Tianjin, which it estimated would cost the port 670 million yuan ($97 million) a year in business.


The five regions affected are some of the most populated and most smog-plagued: Beijing, the port city of Tianjin and the neighboring province of Hebei, as well as Shandong, Shanxi and Henan.


They account for one third of China's crude steel output, while Hebei, Henan and Shandong are the top three aluminum producing regions accounting for around 70% of total output.



(Writing by Tammy Yang   Editing by Harry Huo)
For any questions, please contact us by inqury@fwenergy.com or +86-351-7219322.

Editors Recommendations

1 Chinese govt measures may help ensure peak-season coal supply 2017-06-27

The Chinese government is expected to take a bunch of measures to guarantee coal supply to power plants and avoid drastic price increase in coming peak power demand during the hot summer.

2 Sales restrictions drive thermal coal prices further up in Inner Mongolia 2017-06-27

Thermal coal prices continued to move up in Inner Mongolia, one leading coal production base in northern China, as the local government kept a tight rein in sales quotas for coal mines in the context

3 Weekly China met. coke market analysis and forecast 2017-06-27

China's spot met. coke prices rebounded 30-80 yuan/t in major production bases last week. With abundant stocks and limited production, major steel mills in Shanxi, Hebei and Shandong responded mutedly

4 S Korea May thermal coal imports down 8.3pct on mth 2017-06-27

South Korea's thermal coal imports (including bituminous and sub-bituminous coals) reached 7.85 million tonnes in May, falling 8.34% from a month ago and the fifth consecutive month-on-month decline,

5 Views divided on China thermal coal market 2017-06-26

Market participants remained divided towards the future trend of thermal coal in China's domestic market with offer prices varying greatly from one another. Some traders were optimistic,

6 China plans to merger eight power giants into three 2017-06-26

China's government is looking to restructure its electric utilities. The plan calls for a merger of eight bodies ‒ five state-owned electric companies, two nuclear power operators and state-owned Chin

7 Hebei to extend coal overcapacity elimination to 11.87 Mtpa 2017-06-26

North China's Hebei province planned to phase out coal production capacity of 11.87 million tonnes per annum (Mtpa) this year, said the provincial government in a notice recently. The new

8 China's key steel mills daily output up 5.41pct in early June 2017-06-26

Daily crude steel output of China's 101 key steel mills increased 5.41% from ten days ago to 1.86 million tonnes over June 1-10, according to data released by the China Iron and Association (CISA).

9 NDRC: resolutely curb too fast coal price rise 2017-06-26

China will resolutely curb too fast increase of coal prices, one official with China's state planner said at a meeting on June 25, regarding recent jump in prices of thermal coal used for power genera

10 China coal production areas still face rail bottleneck 2017-06-26

China's top three coal production bases of Shanxi, Inner Mongolia and Shaanxi still face bottleneck in transporting coal through railways, unable to ship coal efficiently to energy-hungry southern and

Most Read Articles

1 China allows coal mines to increase capacity amid price rally 2017-06-19

China will allow some coal mines to increase capacity, the National Development and Reform Commission (NDRC) said on June 16, as Beijing ramps up efforts to boost supply for summer. Both

2 India assures domestic coal supplies for steel, cement companies 2017-06-19

India's Coal Ministry has offered assured domestic coal supplies to companies outside of their power generation industry as another step towards zero coal imports, Mining Weekly reported on June 17.

3 China's coal futures forward curve turns bullish as mercury rises 2017-06-19

China's thermal coal futures rallied to a record high on June 16, lifting September futures to a premium over October, as a prolonged hot spell spurred power demand and low water levels dented hopes o

4 Nippon Steel gives up coking coal pricing role as influence wanes 2017-06-20

Nippon Steel & Sumitomo Metal, Japan's top steelmaker, has given up its decades-old role in setting global coking coal prices because the rise of Chinese and Indian rivals has weakened its influen

5 Russia remains main coal supplier for Ukraine Jan-May 2017-06-20

Russia exported 777,500 tonnes of coal to Ukraine from January to May 2017, Ukraine's energy and coal industry ministry said on June 16. "996,800 tonnes of coal imported from different co

6 Shenhua, Guodian close to announce merger plan 2017-06-21

China's largest coal producer and the country's leading power generator are close to unveiling a merger plan, as listed units of the two announced suspension of trading for "unprecedented" asset trans

7 Coking coal trading around one-year low as price waves 2017-06-21

Coking coal prices are hovering around a year low, with the commodity erasing the gains that it experienced this year amid a major supply disruption, Economic Calendar reported on June 20.

8 Rio backs Yancoal over Glencore for Australia coal mines 2017-06-21

Rio Tinto on June 20 recommended China-backed Yancoal Australia as the buyer of most of its Australian coal mines, rebuffing a surprise higher bid from commodities giant Glencore earlier this month.

9 Heilongjiang to boost clean energy over next 4 yrs 2017-06-20

Heilongjiang, a major industrial province in northeastern China, will actively promote the development of clean energy to replace coal-fired plants over the next four years, said the local branch of t

10 US coal consumption in power sector to increase 3% on yr in 2017 2017-06-19

US electric power sector coal burn is expected to total 699 million short tons (640 million tonnes) in 2017, up 2.95% or 20 million short tons from 2016, assuming natural gas prices meet expectations,