A rough look at the impact of limiting production in 80 cities to the steel industry

In 2017, due to the prevention and control of atmospheric pollution, Beijing-Tianjin-Hebei and surrounding 2+26 cities implemented special atmospheric emission limits to limit peak production. Since the beginning of this year, the situation has become more and more serious. The restricted areas of high-emission industries are no longer confined to Beijing, Tianjin and Hebei, and they are newly included in the Yangtze River Delta, the three provinces, the plains and Other areas. The number of cities involved has increased from 2+26 to 80. . The expansion of the restricted area is an affirmation of the country's focus on environmental and economic development, as well as new requirements for high-emission industries such as steel and cement.

80 cities limit production process

At the beginning of July, the State Council issued the "Three-Year Action Plan to Win the Blue Sky Defence War", further significantly reducing the concentration of fine particulate matter (PM2.5), significantly reducing the number of heavy pollution days, requiring enterprises to meet at least 95% of the hourly average emission concentration to meet ultra-low emissions.

The Metallurgical Industry Planning and Research Institute reported that most of the cities with lower air quality rankings have coking enterprises. China's industries are mainly concentrated in key areas such as Beijing-Tianjin-Hebei, Yangtze River Delta and Yan-Ping Plain, which have an important impact on regional environmental quality.

On July 25, Changzhou issued the “Notice on Adjusting the List of Key Pollution Sources for Compulsory Emission Reduction in Changzhou City”, pointing out that from August 3, the proportion of production limits of some enterprises was dynamically adjusted. Many companies such as Fuyang Shente and Changzhou Zhongtian were affected by limited production. A number of cement companies such as Xiangyang South, Xiangyang Dongfang and Changzhou Yafeng have stopped production.

Business impact

Negative impact: mainly in the following two aspects. First, steel output has plummeted, and market share and influence have declined. In particular, resources in unrestricted areas will flow into the region, directly affecting the brand value of enterprises. Second, the company's profit value has dropped. According to the current long-run steel enterprise rebar, the gross profit per ton of steel is around 1,000 yuan/ton.

Good influence: mainly in the following three aspects. First, it is forced to accelerate the transformation of ideas and ideas, promote the technical transformation of energy-saving and environmental protection projects, and gradually break the technical bottlenecks and improve the level of energy-saving and emission-reduction technologies. Second, the output has fallen sharply, the contradiction between supply and demand has eased, and the market has been supported. Third, some steel enterprises that maintain production efficiency will gradually upgrade their technology and equipment in the production limit, and promote the industry as a whole.

social influence

Mainly in the following two aspects: First, steel enterprises limit production, the total amount of atmospheric pollutants will be greatly reduced, which is conducive to air improvement. Second, it is conducive to promoting the process of corporate restructuring, promoting the implementation of the de-capacity policy, reducing the waste of social resources and reversing the technological progress of related industries.

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