Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  SHENZHEN STOCK EXCHANGE  >  Hbis Company Limited    000709   CNE000000H20

HBIS COMPANY LIMITED

(000709)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector news

China's steel minnows sidestep pollution rules to boost output

07/26/2019 | 03:17am EST
FILE PHOTO: A poster showing Chinese President Xi Jinping is seen in front of the Xinyuan Steel plant in Anyang

BEIJING/SHANGHAI (Reuters) - Small steel mills in China are taking advantage of lax environmental enforcement to ramp up production ahead of bigger rivals, industry and government officials said, jeopardising anti-smog targets and defying industry consolidation.

China's massive steel sector is a key battleground in the country's war on pollution, with air quality in major steel-producing cities like Tangshan and Handan routinely listed among the most toxic.

Tougher environmental laws and a 2016 campaign to shut substandard capacity were designed to both cut smog and boost the share of law-abiding but unprofitable state firms by forcing out smaller, irresponsible rivals.

But uneven enforcement has allowed industry minnows to outcompete larger rivals and raise production, say industry and environment ministry officials.

The China Iron and Steel Association (CISA), which represents state-owned and big privately owned producers, holds its smaller rivals responsible for much of a record surge in output in the first half of this year, which has also driven iron ore prices to record highs. [IRONORE/]

"We must not allow enterprises with low levels of environmental protection ... to compete with enterprises that have invested a lot," Liu Bingjiang, a senior environment ministry official told an industry conference this month.

Larger firms now pay nearly 300 yuan ($43.63) per tonne in environmental compliance costs, compared to as little as 20 yuan for small producers, Liu said.

This puts the cost of curbing pollution at nearly 8% of a large mill's total outlay, compared to as little as less than 1% at a small, non-compliant rival, according to Reuters calculations.

The discrepancy has helped minnows raise output by nearly a quarter in the first five months of this year, CISA data showed, against 6.2% by the association's own members.

This compares with 2017, when its member companies grew output by 6.9%, but the crackdown on sub-standard production restricted growth at smaller mills to just 1.1%.

"This is a dereliction of supervision duty and it should be resolutely resisted," Liu said.

FAILED CONSOLIDATION

Big steel mills are also being forced to upgrade their facilities and transport systems to meet new "ultra-low" emission standards.

Top steel makers China Baowu Group and the HBIS Group said they have spent nearly 3 billion yuan each a year to ensure they meet new standards.

But smaller mills able to game the system, an official responsible for environmental compliance at a privately owned 10-million-tonne per annum mill in Hebei province told Reuters.

"It's getting harder to manipulate emissions data, but there are still some tricks to play to cope with inspections. You have to understand, the ultimate goal for bosses at private companies is to make profits," said the official, who declined to be named due to the sensitivity of the matter.

The environment ministry has frequently accused mills of misplacing sensors, turning off equipment or ramping up production at night to avoid supervision.

"The biggest problem at this moment is the implementation of current emission standards," Wang Kaiyu, vice director at laws, regulations and standards department at the environment ministry said on Friday.

"In the next step, we will strengthen supervision of the implementation."

The government is promoting greater state ownership in steel to control output and preventing rapid increases in imported iron ore prices, but small-scale players have instead increased market share.

The combined crude steel output of China's top 10 steel makers was 329.23 million tonnes in 2018, 35.5% of the country's total output, according to data from the World Steel Association and the National Bureau of Statistics.

That is down from 37% in 2017 and remains well below Beijing's aim of putting 60% of total capacity in the hands of the 10 biggest producers by 2020.

"The market can decide how much steel to be produced in the country, but cannot fully decide who produces the steel," CISA chairman He Wenbo said at the industry conference.

"We should encourage those with high emission standards to produce more while limiting the polluted players," he said.

(Reporting by Muyu Xu and David Stanway; editing by Richard Pullin)

By Muyu Xu and David Stanway


© Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
BAOSHAN IRON & STEEL CO., LTD. 0.00% 6.38 End-of-day quote.11.15%
HBIS COMPANY LIMITED 0.00% 2.26 End-of-day quote.-12.40%
JUST GROUP PLC -2.86% 56 Delayed Quote.-27.03%
MEMBERS CO., LTD. 5.94% 2284 End-of-day quote.0.31%
ONE STOP SYSTEMS, INC. 0.00% 2.7 Delayed Quote.33.66%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) 0.04% 6.5764 Delayed Quote.-5.57%
WILL GROUP, INC. 0.91% 999 End-of-day quote.-20.21%
WORLD CO., LTD. -0.97% 1324 End-of-day quote.-50.80%
All news about HBIS COMPANY LIMITED
08/10Australian shares hit 3-week high as COVID-19 cases stabilise
RE
08/10Australian miner Fortescue wins HBIS iron ore tender in yuan
RE
08/10Australian miner Fortescue wins HBIS iron ore tender in yuan
RE
08/03China steelmaker HBIS lines up investment in Peru iron ore mine
RE
2019EU suspects Chinese steelmakers are dodging anti-dumping duties
RE
2019European steel leaders seek scrutiny of Chinese British Steel rescue
RE
2019European steel leaders seek scrutiny of Chinese British Steel rescue
RE
2019China's steel minnows sidestep pollution rules to boost output
RE
2019China's top steel mills create group to probe surging iron ore prices - docum..
RE
2018RATAN TATA : Tata Steel open to taking majority stake in Thyssenkrupp tie-up - s..
RE
More news
Financials
Sales 2020 112 B 16 991 M 16 991 M
Net income 2020 1 591 M 242 M 242 M
Net Debt 2020 - - -
P/E ratio 2020 15,3x
Yield 2020 4,37%
Capitalization 23 672 M 3 599 M 3 600 M
Capi. / Sales 2020 0,21x
Capi. / Sales 2021 0,21x
Nbr of Employees 34 439
Free-Float 37,1%
Chart HBIS COMPANY LIMITED
Duration : Period :
Hbis Company Limited Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends HBIS COMPANY LIMITED
Short TermMid-TermLong Term
TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 2
Average target price 2,60 CNY
Last Close Price 2,29 CNY
Spread / Highest target 13,5%
Spread / Average Target 13,5%
Spread / Lowest Target 13,5%
EPS Revisions
Managers
NameTitle
Wei Jun Dong Chairman-Supervisory Board
Jian Liu Chairman
Guang Shen Chang CFO, Director & Chief Accountant
Yu Zhu Zhang Independent Director
Jian Zhong Zhang Member-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
HBIS COMPANY LIMITED-12.40%3 583
ARCELORMITTAL-2.22%19 336
POSCO2.54%17 011
NUCOR-2.15%16 627
NIPPON STEEL CORPORATION-20.19%11 751
TATA STEEL LIMITED20.53%8 933