Why can't the excess capacity be removed?
Before approval, the company launched a million-ton steel project in violation of regulations; stealing the beam and replacing the pillar, replacing the steel production capacity with the illegal and uncompleted project; fooling around, the illegal production capacity should be eliminated early for production capacity replacement... Promote the supply-side structure of the steel industry in the central government Under the clear requirements of reforming, resolving excess capacity, and strictly controlling new capacity, why can't some local steel production capacity be removed?
What are the profit drivers and deep-seated reasons behind this?
Recently, the reporter followed the Central No. 1 Ecological Environmental Protection Inspection Team to inspect in Hebei Province and found that Handan City has not done enough to implement steel production capacity reduction, there are chaos such as illegal construction of steel projects, false replacement of steel production capacity, etc., the implementation of industrial structure adjustment is not effective, relevant departments. Regulation is useless.
High-rise closed enclosure construction, without the relevant approval procedures, a new blast furnace was erected
Handan City is located in the southern part of Hebei Province, and is a channel city for the transmission of air pollution in the Beijing-Tianjin-Hebei region.
There are 16 iron and steel enterprises, with a pig iron production capacity of 42.73 million tons/year and a crude steel production capacity of 38.73 million tons/year.
On March 31, the reporter sent a sinking working group with the inspection team to the east area of the factory area of Hebei Xinjin Iron and Steel Co., Ltd. (hereinafter referred to as "Xinjin Iron and Steel").
Passing through the towering refining towers and cascading pipelines, the open space on the south side of the original No. 2 blast furnace was covered with green gauze.
According to the inspectors, a preliminary investigation in February this year found that a new blast furnace had been built in the area, the main building had been completed, and other ancillary facilities were under construction.
After in-depth inspection, it was found that Xinjin Iron and Steel, after dismantling the original No. 2 blast furnace in 2021, adopted a high-rise closed enclosure construction operation without obtaining relevant approval procedures such as energy assessment and environmental assessment, and illegally started new construction on the open space on the south side of the blast furnace. A blast furnace of 1260 cubic meters, involving a production capacity of 1.16 million tons.
A similar situation also appeared in Hebei Xinwu'an Iron and Steel Group Baking Iron and Steel Co., Ltd. (hereinafter referred to as "baking iron and steel").
Without obtaining relevant approval procedures, the company illegally started construction of a 1,580-cubic-meter blast furnace at the end of 2021, involving a production capacity of 1.37 million tons.
By the time of the early investigation in February this year, the base of the blast furnace was basically completed, and the hot blast furnace had taken shape. It is planned to be completed and put into operation in June 2022.
The reduction of overcapacity in the steel industry is an important measure to adjust the industrial structure, strengthen pollution prevention and control, and promote sustainable development.
Relevant national documents clearly require that new production capacity in industries such as steel is strictly prohibited, and replacement of production capacity with equal or reduced production capacity must be implemented for those that are really necessary.
Under the background that the state strictly controls the blind development of "two high" (high energy consumption, high emission) projects and promotes the reduction of overcapacity in the iron and steel industry, some iron and steel enterprises in Handan are still blatantly building iron and steel projects in violation of regulations.
The reporter saw from the drone inspection pictures provided by the inspectors that the main part of the newly built blast furnace of Xinjin Iron and Steel is much higher than the surrounding factory buildings, almost the same height as the chimney in the factory area, which is quite conspicuous at first glance.
At the construction site of the new blast furnace for melting steel, a large number of cylindrical building materials wrapped in blue curtains are stacked on the ground, and the bases and columns required for the foundation of the blast furnace are clearly identifiable.
When talking with the inspectors, the relevant person in charge of the enterprise still has a market for misunderstandings and flukes such as "running through the formalities while building the project" and "thinking that it is not a big problem to build before approval".
Replacing uncompleted projects or projects that should be shut down
The reporter learned that in order to accelerate the adjustment of the industrial structure and encourage iron and steel enterprises to withdraw from excess production capacity, the state has specially formulated relevant requirements and specially set up a special reward and subsidy fund for the structural adjustment of industrial enterprises.
In March 2016, according to the overall arrangement of Hebei Province and Handan City to resolve excess iron and steel capacity, Xinjin Iron & Steel assumed the task of resolving overcapacity that year.
A 450-cubic-meter blast furnace of the company was included in the relevant work plan and should be dismantled and withdrawn.
After that, the company replaced a 600-cubic-meter blast furnace in the east area of the plant to implement the task of reducing capacity, and the 450-cubic-meter blast furnace capacity was retained.
Strangely, for the 600-cubic-meter blast furnace of Xinjin Iron and Steel, there is no trace of its existence.
Inspectors called up the satellite image of the plant in 2016, but did not find the 600-cubic-meter blast furnace.
After collecting evidence, on-site investigation, and interviewing, the inspection team found that Xinjin Iron and Steel had illegally started construction of a 600-cubic-meter blast furnace in the eastern area of the plant in 2014, but it was not actually completed and put into operation, and could not be used to reduce steel production capacity.
In order to retain the production capacity of 450 cubic meters of blast furnaces, Xinjin Iron and Steel replaced the 600 cubic meters of blast furnaces that had been illegally started but not yet completed to resolve the production capacity task, and won a total of 63.83 million yuan of relevant national and provincial awards and subsidies.
In Handan Iron and Steel Company, its original 1,000 cubic meter blast furnace should have been shut down as early as 2011, but the blast furnace has been producing illegally until the first round of central ecological environmental protection inspectors pointed out relevant problems in 2016. The lockdown was imposed but not removed.
Hebei Province and Handan City included it in the 2018 task of reducing overcapacity in the steel industry.
The inspector found that Handan Iron and Steel Company violated regulations in 2019 by participating in the replacement of the 1,000-cubic-meter blast furnace in the relocation of its old area, as one of the sources of capacity indicators for the replacement of the new factory area under construction.
"This is actually equivalent to first gaining weight and then losing weight, first raising prices and then discounting." The inspectors calculated the accounts for reporters, and regarded projects that were not actually built or should have been shut down long ago as the target of capacity resolution and replacement. Increasing production capacity to maintain existing production capacity.
Insufficient work to reduce overcapacity, lax checks on capacity replacement, and lack of regulatory responsibility for relevant departments
The inspection team believes that Handan City has not done enough to promote the reduction of overcapacity in the iron and steel industry, the relevant departments have not strictly checked the audit of production capacity replacement in the iron and steel industry, and the supervision of illegal construction of enterprises is not in place.
For example, regarding the illegal construction of blast furnaces at Xinjin Iron and Steel and Baking and Melting Iron and Steel, the two illegally constructed iron and steel projects started construction almost at the same time. Although they have been dismantled, the relevant local authorities said they were unaware of the violations, revealing that supervision was not in place. question.
Regarding the replacement of the iron and steel production capacity problem with illegal and uncompleted projects, the reporter saw from the relevant information provided by the inspection team that Xinjin Iron and Steel started the construction of a 600-cubic-meter blast furnace in violation of regulations at the end of 2014 without performing any approval procedures. On and off until the end of March 2016 it was still not built.
When it comes to the acceptance of production capacity resolution, this illegal and unbuilt blast furnace is used as an alternative project, and it will be reported step by step until it passes the acceptance.
Although the city and county governments and relevant departments have conducted on-site inspections many times, they turned a blind eye to the company's "stealing beams and replacing pillars" to complete the task of resolving excess capacity and obtaining national awards and subsidies, confirming that it has completed the task of resolving excess capacity in the steel industry.
Similarly, the original 1,000-cubic-meter blast furnace that Handan Iron and Steel Company illegally used for capacity replacement is the original capacity that should have been eliminated long ago after the company's technical transformation.
The reporter reviewed the 2017 revised version of the "Implementation Measures for Capacity Replacement in the Iron and Steel Industry", in which Article 5 clearly stipulates that the production capacity included in the steel capacity reduction task shall not be used for replacement.
However, the 1,000-cubic-meter blast furnace, which obviously cannot be used for capacity replacement, was not strictly checked by the relevant departments during the review, allowing it to pass the inspection.
"In actual work, there are still loopholes and blind spots in supervision. Some supervision measures and methods are mere formalities and have not played their due role. Supervision inspections by competent authorities and territorial townships are not in place, and daily inspections are not in-depth, comprehensive and detailed." The relevant person in charge of the local government said that they will comprehensively consolidate the supervision responsibility of the department and the territorial responsibility of the township, improve the long-term mechanism, and do a good job in the implementation of various supervision measures.
The inspection team will further investigate and verify the relevant situation, and do follow-up inspection work as required.
Unswervingly consolidate and improve the results of reducing production capacity, and take a new road for high-quality development of the steel industry
A person in charge of a steel plant told reporters that the current steel industry is in good condition, and downstream steel demand continues to be at a high level.
Thanks to the market pull, the price of steel has risen, and the production and sales of steel enterprises are booming, and the profits are quite considerable.
According to the data released by the China Iron and Steel Association, in the first 11 months of 2021, the member steel enterprises realized a total profit of 351.7 billion yuan, a year-on-year increase of 86.46%; the sales profit margin was 5.54%, a year-on-year increase of 1.48 percentage points, and the industry benefit was the best in history. level.
The "good days" in the steel industry are hard-won.
As the largest steel producer in the world, my country has suffered from severe overcapacity in the steel industry in the past period. In 2015, the entire industry suffered losses.
In recent years, the state has vigorously promoted supply-side structural reforms, and has made overcapacity reduction a key task. During the "13th Five-Year Plan" period, excess production capacity has been reduced by more than 150 million tons, and the production capacity of "strip steel" has been banned by more than 140 million tons, reversing supply and demand. Unbalanced situation, the industrial structure is continuously optimized.
However, with the resurgence of the steel market, the impulse to expand steel production capacity in some places and companies has risen, and the steel industry has a long way to go to reduce carbon and production capacity.
According to the analysis of Li Xinchuang, Secretary of the Party Committee and Chief Engineer of the Metallurgical Industry Planning and Research Institute, the iron and steel industry accounts for about 15% of the country's total carbon emissions. The task is urgent and arduous, and the rapid growth of steel consumption will lead to an increase in crude steel production, which is not conducive to the realization of the carbon peaking goal.
Experts suggest that we should make good use of the favorable opportunity of the current loose market environment and high-efficiency growth, continue to consolidate and improve the achievements of iron and steel to resolve excess capacity, while maintaining a zero-tolerance and high-pressure situation for violations of laws and regulations, through policy guidance, tax relief and financing support. and other measures, support iron and steel enterprises to promote ultra-low emission, energy saving and environmental protection and low-carbon technological transformation, promote industrial layout optimization and structural adjustment, and further accelerate transformation and upgrading.
The ineffective implementation of steel overcapacity will be held accountable.
According to the relevant requirements of the Party Central Committee and the State Council, those who fail to implement their ecological and environmental protection responsibilities, shirk their responsibilities, and fail to complete their work tasks shall be strictly held accountable in accordance with discipline and law, and shall be held accountable for life.
The relevant opinions of the State Council clearly pointed out that the implementation of the goal of resolving excess capacity in various regions should be listed as an important part of the supervision and inspection of the implementation of major decisions and deployments of the central government, and the supervision and inspection of the entire process of resolving excess capacity should be strengthened.
The reporter noticed that in recent years, the State Council and relevant departments have successively carried out special inspections and "look back" inspections on the iron and steel industry to resolve excess capacity. "See" implementation as the focus of the inspection.
All localities and departments must fully, accurately and comprehensively implement the new development concept, and take a firmer attitude and more effective measures to prevent excess production capacity from "resurging".