» 09/16/2010 15:36 CHINA Energy-hungry China might have to reduce steel production Energy cuts imposed by the government could cut deep into on steel output, already declining last year.
Beijing (AsiaNews/Agencies) – Steel production in China appears to be down. Despite high demand from various industries, curbs on power consumption are cutting into overall steel production and iron ore imports. For experts, 26 million tonnes of crude steel production could be lost by the end of this year, the equivalent of 42 million tonnes of imported iron ore.
On 7 September, the authorities ordered 18 steel mills in the northern province of Hebei to stop production for up to a month. The plants in question were able hitherto to bypass government environmental controls and energy saving measures. The decision to shut them down was motivated by high local pollution levels and out of control energy use.
Last month, the mainland imported 44.6 million tonnes of iron ore, down 13 per cent from 51.3 million tonnes in July.
Based on annualised figures for imports in the first seven months, the mainland was on course to import about 618.2 million tonnes of iron ore this year, down from 628.3 million tonnes last year.
"It remains to be seen just how much China's steel output will be affected by the electricity allocation restrictions [but] there is certainly potential for a decline in steel output,” said Jeffrey Landsberg, of the New York-based Commodore Research & Consultancy. “Estimates have suggested that the affected steel mills will produce anywhere from 10 to 70 per cent less steel than normal.”
Chinese authorities are more optimistic. Luo Tiejun, deputy head of the Raw Materials Branch of the Ministry of Industry and Information Technology, said, “There is little chance that China's steel sector will see a significant change in demand in coming months". Indeed, “620 million to 630 million tonnes of crude steel would be produced this year.”
