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China Steel Hub Cuts Output as Beijing’s Air Worsens Ahead of Olympics

China Steel Hub Cuts Output as Beijing’s Air Worsens Ahead of Olympics

Authorities in China’s top steel-making hub of Tangshan are ordering more output curbs as air quality deteriorates in Beijing -- less than 200 kilometers away - ahead of the Winter Olympics that start next week.

Levels of the most dangerous type of air particulate in the Chinese capital have surged over the past week, and are now at the highest level since early November, according to readings from the U.S. embassy. Authorities want to ensure blue skies to showcase the winter games, which run in and around Beijing from Feb. 4 to 20.

China Steel Hub Cuts Output as Beijing’s Air Worsens Ahead of Olympics

Tangshan’s local government issued an orange alert on Sunday to combat heavy pollution until further notice, according to Mysteel, which means some steel mills will be forced to curb output from blast furnaces and sintering units. Calls to Tangshan’s government offices went unanswered. 

There were similar cuts to industrial activity before the Summer Olympics in Beijing in 2008 and the steel industry -- a major source of air pollution in China -- has been bracing for stricter curbs. 

To ensure clear skies for the games, local governments in Beijing and surrounding provinces will be allowed to take action against heavy polluting industries and vehicles, the environment ministry said at a briefing on Monday. The ministry said it will ensure any measures don’t conflict with ensuring winter energy supplies or Covid-19 controls.

Tangshan said in August that it would extend an existing 30% cut in production for some steel-makers through mid-March. The move to orange comes after the city announced winter curbs last week, which Mysteel said would result in the operations of 16 blast furnaces being suspended from Jan. 30 to Feb. 20 and March 3 to 13. 

Despite the recent deterioration, Beijing’s air quality met national standards last year for the first time since monitoring started. Even so, particulate levels in the Chinese capital are almost seven times as high as WHO guidelines and constitute an ongoing health risk for residents, according to the Centre for Research on Energy and Clean Air. 

The restrictions in steel output will lead to lower demand for key ingredient iron ore. Futures in Singapore fell 3.7% to $131.95 a ton as of 3:28 p.m. local time after jumping 8.2% last week.

©2022 Bloomberg L.P.