SteelOrbis Shanghai
The Guangdong provincial authorities in recent days commenced their new drive for the elimination of dated steel capacities in Meizhou. In addition, officials from the Provincial Development and Reform Commission disclosed that the province is targeting the elimination of 10 million mt of out-of-date steel capacity in the period of the "Eleventh Five-Year Plan" (2006-2010).
According to the data provided by Guangdong's Provincial Development and Reform Commission, a significant difference exists in electrical and water consumption, as well as in emissions, between small mills and their larger technologically-advanced counterparts. For example, the electrical consumption of mills using small electric furnaces is 700 kw•h per ton steel; on the other hand, large producer Guangzhou Zhujiang Steel which also has an electric furnace system uses only 300 kwh per ton steel. As regards water consumption, mills with small electric furnaces discharge waste directly into rivers and seldom use recycled water; in comparison, Guangzhou Zhujiang Steel can achieve a water recycling rate of 98 percent. Looking at the issue of emissions, the dust content of fumes from mills with small electric furnaces is 500 mg/m3, as opposed to a mere 25 mg/ m3 for Guangzhou Zhujiang Steel. It is predicted that if 10 million mt of dated capacities is successfully eliminated, over two million mt of standard coal will be saved, and there will be emission reductions equal to 10,000 mt of SO2, 10,000 mt of NOx, 50,000 mt of dust and 40 million mt of waste water. The result will be a great improvement in the air quality and environment of the whole province.
The targeted 10 million mt of dated capacities are mainly located in areas outside of the Pearl River Delta. 143 steel companies are expected to be closed down during the period in question, with the 16 small mills in Meizhou first on the list.
At the same time, Guangdong Province is to cancel the preferential policies in relation to electricity, land and taxation which used to be applicable for the high energy-consumption and high-pollution sectors. In addition, new electricity rates are to be implemented. Preferential measures issued by local governments are to be forbidden. Furthermore, a strict electricity price rate shall be applied to the small mills which are to be shut down; the rate in question will be RMB 0.2/ kwh higher than the previous level (i.e. the base price without any preferential policies).