The Chinese government announced a series of new regulations on Sept. 3 aimed to scrap obsolete production capacity, and to make the industry more energy efficient and environmental friendly. These measures will take effect as of October 1.

The announcement, published by the Ministry of Industry and Information Technology (MIIT), said the new regulations relate to stricter requirements on quality of products, energy consumption, emissions, technology and equipment standards, production scale as well as security and social responsibility for iron and steel companies.

The new regulations rule that iron and steel companies are forbidden to produce a list of obsolete products, including hot rolled silicon steel and low tensile rebar. Further emission levels of dust, sulphur dioxide and consumption of water should not exceed 1.19kg, 1.63kg and 4.1m3 per tonne of steel respectively.

On equipment capacity requirements, blast furnaces should be more than 400m3, converters and electric arc furnaces should be above 30t heat size, while high-alloy steel furnaces should be over 10t. As for admittance standards of production scale, a company which produces carbon steel products should have an annual capacity of no less than 1Mt in 2010, while a company which produces special steel products should have an annual capacity of 300kt or above.
Moreover, any serious accidents within a two year period could deprive a company of its production certificate and worker safety and employees’ payments should be guaranteed.

The new regulations are said to be formulated in line with the developments of the country’s iron and steel industry, will be enforced on October 1, 2012. Meanwhile, the previous regulations governing eliminating obsolete capacity which were formulated in June 2010, will expire

Source: China Metals e-mail