International Steel Mills

China Raising Electric Rates for Outdated Mills

Written by Sandy Williams

Outdated steel mills in China will pay about 66.7 percent more per kilowatt for electricity as of January 1 this year.

The National Development and Reform Commission raised the rate on outdated steel companies that are scheduled to be phased out as part of the effort to reduce steel capacity and encourage supply side reform.

NDRC says others producers who do not meet capacity-cut goals will receive the same penalty. Local authorities are permitted to increase the rates even further to encourage compliance.

In 2004, the NDRC has implemented a three-tier pricing system for eight energy-intensive industries. Companies within the industry are categorized as “encouraged,” “restricted,” or “outdated” with pricing varying dependent on classification.

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