BF Closures may Propel Prices in Zhejiang

BF Closures may Propel Prices in Zhejiang

Ningbo Iron and Steel surprised the steel community by temporarily closing a 2,500-cubic-meter blast furnace at a time when the steel market is beginning to perk up. The furnace won't be resumed until the end of this year, affecting at least half of its total output. During this period, the company will have it remolded to meet the new standard on energy consumption. Ningbo Steel runs two blast furnaces, both 2,500 cubic meters.

The Jiangsu government has imposed strict electricity-limit policy on the local steel sector, which forces steelmakers into closure for at least ten days every month until October this year. Output of Shagang, Yonggang and Zenith Steel has been jolted to a varying degree.

In contrast, governments of Hebei, Shaanxi, Guizhou and Guangxi seemed to be more tolerant to energy indulgence. An executive of a medium-sized private mill in Hebei said he hasn't heard of news of enforcement suspension in those provinces just for the sake of fulfilling energy-saving goal.

This discrepancy in the attitude between local authorities made the effectiveness of the latest energy-saving and emission reduction move initiated by the central government obscure.