Ministry of Industry and Information Technology: Ban Production of One or Two Rebars from Next Year

On the 15th, the Ministry of Industry and Information Technology in its official website on the "iron and steel industry production and operation of regulatory conditions" (referred to as "conditions") for comments, "conditions" clearly proposed that next year China's iron and steel enterprises are strictly prohibited the production of a threaded steel, secondary threaded steel, hot-rolled silicon steel Tablets and other products are backward production capacity.

The secondary steel production accounts for half of the rebar production. It is reported that "conditions" are the normative documents for the basic conditions for the production and operation of the existing iron and steel industry. The Ministry of Industry and Information Technology has again revised the steel industry construction and reconstruction projects to achieve higher access standards. One of the biggest changes in the newly revised “Conditions” is clearly stated “From 2013 onwards it is forbidden to produce first-level rebar, second-grade rebar, hot-rolled silicon steel and other products.

It is understood that, according to the mechanical properties of steel bars, one to four grades of steel bars, of which three and four are collectively referred to as high-strength steel bars. “Compared with high-strength steel bars, one- and two-tier rebars have poor pressure bearing capacity, and they use more steel and are more polluting during the production process. The country has been promoting the use of high-strength steel bars for these years,” said analysts.

“In 2011, China's steel output accounted for 17.5% of the total steel output, among which the proportion of primary rebar was very small, and now there are very few steel mills. Secondary rebar currently accounts for about half of the total rebar production. The output of rolled silicon steel sheet is also shrinking, accounting for less than 10% of silicon steel sheet production,” said Hu Yanping, an analyst at China United Steel Network.

The elimination of backward production capacity increases "Unlike the model statement in the document issued in 2010, the execution power of the eliminated products will be greatly enhanced after being clearly written into the operating conditions; although the "Guided Catalogue" released in the same year will be used to eliminate backwardness. The production capacity has made a request, but because it is a guidance document, there is no mandatory effect on steel companies, so the elimination effect is not satisfactory.” Wang Guoqing said.

Li Xinchuang, deputy secretary-general of the China Iron and Steel Association, told reporters that this time the national policy has increased the intensity and pace of elimination, which is considered to be a good start, but the Chinese steel industry is so large that the elimination must be a step-by-step approach. Can not expect one step in place.

How will the elimination of secondary rebar, which accounts for half of the output of rebar, affect steel companies?

Analysts believe that in this round of the coming tide of elimination, large steel companies that produce high-value-added products will have obvious advantages, and private small steel companies will be subject to greater impact. Although Hebei Iron & Steel Co., Shagang Steel Co., Ltd. and other large steel enterprises have large production of rebar, due to the relatively rapid shift to the production of tertiary rebar, the impact should be small.

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