China’s Shandong province authorities plan to cut 18.76mn mt steelmaking capacity and 13.97mn mt ironmaking capacity in the next five years according to the country’s 14th five-year plan. The production cuts are aimed at achieving supply-side adjustments and reducing emissions.
Structural adjustment
Besides withdrawing steel and ironmaking capacity, authorities are directing enterprises to transform their blast furnace (BF) into the electric furnace (EAF). By 2025, the province targets converting 10pc BF-converter long process producers to EAF-short process enterprises and coking production capacity will be cut by 2.95mn mt.
The measures also include exiting 19.4mn mt steel radial tire and 36mn mt semi-steel radial tire production capacity as well as elimination and integration of ‘zombie enterprises’ in the automobile sector
Energy
The province aims to reduce coal consumption by 12mn mt, which includes the shutdown of low-efficiency thermal power plants by October, shutdown outdated coal-fired units and withdrawal of 7mn KWT low-efficiency thermal power units. By the end of 2025, the average coal consumption for power supply will be less than 300g/kWh.
Transportation
Elimination of 400,000 diesel trucks above National III and below by October. Also, 13,000 medium-sized diesel trucks National State IV operation will be eliminated. All 26 railway freight dedicated lines included in the national plan have been completed and put into use. China is focusing on increasing freight volume by railways and waterways with the construction of 12 special railway lines, which emphasise on port collection and distribution system between Qingdao Port, Rizhao Port and Yantai Port.
According to the 14th five-year plan, Shandong province needs to reduce the concentration of PM2.5 by 20pc (9.2μg/m3), and the concentration of O3 by 10pc (17.2μg/m3) to improve air quality. In 2021, PM2.5 needs to cut by 4pc (2μg/m3), while O3 concentration dropped by 2pc (3.5μg/m3).