Via the FT:
China is planning a new crackdown on steel production in the north-eastern city of Tangshan in a bid to prevent false reporting of mill closures by local governments reluctant to obey shutdown orders. Officials in the northeastern province of Hebei have been sent a government notice, seen by the FT, stating that an investigative team had been sent to Tangshan, a leading steel producer, to verify the closure of mills. The notice, sent on Saturday, cites orders from President Xi Jinping and Zhang Gaoli, the vice-premier, for Tangshan to investigate the problem of falsely reported plant closures and rising steel output. The Hebei government declined to comment on Monday. The authenticity of the memo was confirmed by a state-run industry group.
More from Reuters:
At the start of the year, Tangshan promised to shut 8.6 million tonnes of annual crude steel capacity in 2017. It pledged to make cuts of 40 million tonnes over the 2013-2017 period and had already shut 31.9 million tonnes by the end of last year.
Hebei promised to cut crude steel capacity to less than 200 million tonnes a year in the province by the end of 2020, down from 286 million tonnes in 2013. It aims to shut 15.6 million tonnes in 2017.
However, the Ministry of Environmental Protection has routinely named and shamed municipal governments in Hebei for failing to implement pollution rules.
Environmental group Greenpeace said in February that China’s active steel capacity actually rose by 35 million tonnes in 2016 after the high-profile closure program focused mainly on shutting plants that had already been idled.
It’s all just noise now anyway. With the macro set to slow and an enormous inventory overhang, the fat lady is singing.
