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China’s war on pollution slows growth in top steel province

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* Growth hit by slowing demand, restructuring, pollution controls

* Hebei to cut 5 mln T of steel capacity in 2015, slower than 2014

* Coal consumption down 15 mln T last year (Updates to add governor comments, adds 2015 targets)

BEIJING, Jan 9 (Reuters) – Tougher anti-pollution measures and slowing demand slowed economic growth in China’s top steel producing province of Hebei to 6.5 percent in 2014 from 7.7 percent in the previous year, governor Zhang Qingwei said in his annual report on Thursday.

Hebei, which surrounds the capital Beijing, produces about a quarter of China’s total steel output.

The poorly regulated sector has been one of the primary targets of a government-led war on pollution as 7 of China’s 10 smoggiest cities are in Hebei.

As a result, economic growth in the province is likely to have undershot a target of 8 percent for 2014 by as much as 1.75 percentage points, said state news agency Xinhua, citing Chen Yongjiu, the head of the provincial Development and Reform Commission.

Polluted Hebei has been under pressure to reduce its dependence on heavy industries like coal, steel and cement, but it has struggled to find viable alternative sources of growth.

“In the year that has just passed, the complex and difficult challenges facing our province were remarkable,” governor Zhang told the annual session of the provincial legislature.

With Beijing vowing to get tough on the sources of smog, Hebei pledged in 2013 to cut crude steel capacity by 60 million tonnes over the 2014-2017 period, with 60 million tonnes of cement output and 30 million tonnes of coal consumption to go over the same period.

Governor Zhang said coal use was cut by 15 million tonnes in 2014 and a further 5 million tonnes will be shed this year. In 2014, it also cut 39.18 million tonnes of cement production capacity, with another 6 million tonnes set to go in 2015, putting the province well on track to meet its targets.

However, while 15 million tonnes of crude steel capacity were shut last year, the pace of the closures appears to have slowed, with the province aiming for a 5 million tonne reduction in 2015, Zhang said in an annual work report published on Friday by the official Hebei Daily newspaper.

The province’s official steel capacity stood at 286 million tonnes a year at the beginning of 2014. Crude steel production in Hebei in the first 11 months of last year reached 171.27 million tonnes, down 1.7 percent compared to the same period of 2013.

Hebei officials have called on the central government for more support, and China is about to publish wide-ranging plans to integrate the province’s economy with Beijing and Tianjin in order to help reduce growing income disparities.

reuters

Zhejiang Yaang Pipe Industry Co., Limited

Article Categories:
Metals · Steel

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