China Set to Wage Long-Term War on Smog

by on

eyetronic/Adobe Stock

If you thought China’s environmental crackdown on polluting industries during this winter heating period was a one-off effort, think again.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Liu Youbin, a spokesman at the Ministry of Environmental Protection, is quoted by Reuters as saying that Beijing intends to extend its policy over the 2018-2022 period.

“The new three-year plan will continue to make Beijing-Tianjin-Hebei its key focus but it will also focus on other major regions like the Yangtze river delta, the northeast and Chengdu-Chongqing,” he is quoted as saying.

China’s previous effort, covering 2013-2017, was a largely unmitigated disaster.

Concentrations of hazardous particles known as PM2.5 were supposed to be reduced by 25%, Reuters reports, but with near-record PM2.5 readings in January and February last year, it was clear more drastic action was required.

Northern China only managed to meet 2013-2017 air quality targets by the end of 2017, largely thanks to a campaign that forced polluting factories in 28 cities to reduce output over the winter, Reuters reports. The resulting clampdown on the worst offenders among steel mills, coke plants and aluminum smelters has had a profound impact on supply, demand and prices in those markets. So, news that Beijing intends to roll out the program to include the Yangtze and Pearl River deltas further south, in addition to regions in the northeast, means the story has much further to go.

Concentrations of PM2.5 have fallen by up to 70% to 36 micrograms per cubic meter, almost meeting the state standard of 35 micrograms. Readings in the Yangtze and Pearl River regions, which include Shanghai and Guangzhou, actually increased. As a result, readings for the whole of China only dropped by 20% for the month of January to an average of 65 micrograms, underlying the scale of the challenge ahead.

Still, where there is a centralized will there is a centralized way. You can be sure Beijing will prosecute this campaign with considerable vigor in 2018.

When the current heating period ends in late March, controls will be relaxed but the indications are it will not be business as usual. Although the low-hanging fruit of coal-fired domestic and small commercial premises will be the primary target, greater attention will also be given to larger enterprises and, indeed, whole industries.

China continues to need steel, aluminum, zinc and a range of other energy-intensive metals, so the most likely outcome is tighter regulations and investment in more advanced, and, hence, cleaner technology.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

That is admirable, of course, but it will also encourage a more rapid move up the value chain for producers looking to get payback on their new kit.

Leave a Comment

Your email address will not be published. Required fields are marked *