FOCUS: China's autumn-winter steelmaking curbs put economics first

Steelmaking restrictions planned for China’s northern region - where the concentration of mills are the highest in the country - during the autumn-winter period appear to be looser this year compared with the corresponding period of last year.

While no official guidelines have emerged, a draft of measures to control air pollution in 28 cities in the region during the October-March period has been circulating in the market since mid-September. In contrast with the specific measures prescribed for the steel industry during the last heating season - when centralized heating systems, many of which are coal-powered, are switched on over the autumn-winter period - the current draft puts emphasis on individual approaches tailored to respective mills and cities. As a result, expectations have emerged in the market over the possibility of steel production rates over the next six months not experiencing as significant a cut as previously. Economic driver Some market participants have opined that the looser restrictions are meant to stimulate economic growth. “Higher steel output means higher domestic gross product and tax income for local governments. After all, land sales - a major source of income - have decreased...

Published

Jessica Zong

September 24, 2019

09:23 GMT

Shanghai