Tanshan, China's largest steel city, has imposed 50 percent production restrictions on blast furnaces, sintering and pelletizing for most of the city's steel mills by August 1, which should support near-term steel demand and lower iron prices. ore.
City officials are struggling to reduce pollution and have previously closed several factories to fully implement production restrictions during the fall /winter season.
Today, the most active iron ore contracts on the Dalian Commodity Exchange fell 1.1 percent, while rebar and hot rolled coil (HRC) contracts rose 2.3 percent and 3.7 percent, respectively. p>
Six steel mills in Group A, including Shougang Qian 'an, Tangshan Steel, Shougang Jingtang, Wengfeng, Delong and Sinogiant, will be required to cut steel production by 20 percent in order to meet emission standards. like all other factories will have to cut production by 50 percent by August 1.
The city government will decide on restrictions after August 1, depending on air quality and meteorological conditions at the time.
According to Zhongtai Securities, the total loss of steel production due to these restrictions could be about 88,000 tons per day. Steel strip production could drop 32 percent, construction steel production by 23 percent and Tangshan hot and cold rolled steel by 34 percent.
