China asks regions to spell out how they will crack down on low-grade recycled steel

Reuters News
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Posted: Jan 20, 2017 7:47 AM

BEIJING (Reuters) - China has asked local authorities to provide a list of producers of a highly-polluting kind of low-end steel product, with details of specific measures and a timetable for phasing out its production, as part of China's drive to tackle smog.

The state economic planner, the National Development & Reform Commission (NDRC), requested local authorities to submit the list to relevant central government agencies by Jan. 20, according to a statement on the website of the National Energy Administration.

The government has pledged to halt production of the polluting low-end steel product by the end of June and has sent 12 inspection groups to areas including Hebei, Henan, Guangxi and Heilongjiang to oversee the move, state media Xinhua has reported.

The move is part of the government's efforts to tackle smog as well as to cut excess steel production capacity.

News of the renewed crackdown pushed China's steel rebar prices to three-week highs last week.

The low-grade steel produced in small low-tech furnaces, often using recycled material, has been identified as not only as a source of pollution but also a major safety hazard because the steel products are easy to break.

The crackdown will affect about 4 percent of the country's steel output, according to Xinhua.

China has launched a campaign to shut down substandard steel production as part of its war on pollution and industrial overcapacity. It is planning to close 100-150 million tonnes of annual steel production capacity over the 2016-2020 period.

Donald Trump, due to be sworn in as U.S. president later on Friday, has stacked his trade transition team with veterans of the U.S. steel industry's battles with China, signalling a potentially more aggressive approach to U.S. complaints of unfair Chinese subsidies for its exports and barriers to imports.

(Reporting by Chen Aizhu; Editing by Adrian Croft)