China is considering radical steps to curb pollution in its industrial north

Photo by Guang Niu/Getty Images

China is considering drastic measures to curb choking pollution in its industrial north, outlining plans for additional cuts to steel and aluminium production to improve air quality.

According to Reuters, citing a draft policy document from China’s Ministry of Environmental Protection (MEP), the government is considering plans to cut steel and fertiliser capacity by at least half, and aluminium capacity by at least 30% in 28 cities across five regions from around late November to late February, in order to reduce smog during colder months.

The proposed curbs would be introduced in the province of Tianjin, Hebei, Shandong, Shanxi and Henan, those that surround the nation’s capital, Beijing.

Reuters calculates that the proposed measures would reduce China’s total annual steel output by 8% annually, and aluminum output by an even larger 17%.

Along with proposed output curbs, it is also said to be considering stopping Tianjin, one of the nation’s busiest ports, handling coal within months, detailing plans to divert shipments to Tangshan, 130 kilometres to the north.

This would shift large volumes of coal from trucks to rail, helping to reduce truck emissions.

When contacted by Reuters, the Ministry declined to comment on contents of the draft.

However, while only a draft document at this point, the news had a pronounced impact on Chinese futures on Monday with broad-based gains recorded across base and bulk commodities, led by rebar, iron ore and coking coal.

That exuberant price action also flowed through to spot markets with the price for 62% iron ore fines leaping by 6.5% to $92.23 a tonne, leaving it sitting at the highest levels since August 2014.

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