According to market sources, the authorities in Tangshan city, a major hub for steel production in China, are preparing to implement stricter production restrictions in September compared to those announced earlier this week.
The latest official statement issued earlier this week had indicated that 16 steel mills, including grade-A steel mill Shougang Qian’an and coastal mills, will have to cut sintering and pelletizing capacity utilization rates just by 20 percent, while the capacity cuts for other steel producers were announced at 30 percent for September 1-27, as SteelOrbis previously reported. However, according to the latest rumors, the production cuts may be increased by up to 50 percent over this period. Moreover, mills may be ordered to suspend production fully starting from September 28 and continuing up to October 4. Nevertheless, no official document has yet been published regarding such measures.
The Chinese authorities may seek to implement these tighter restrictions in Tangshan in order to improve the air quality before the upcoming military parade for the 70th anniversary of China’s National Day on October 1, SteelOrbis understands.
Rebar futures at the Shanghai Future Exchange have rebounded slightly today, August 29, following the previous decline, supported by possible production cuts and hopes for seasonal demand improvements in China. January futures were settled at RMB 3,304/mt today, up RMB 18/mt ($2.5/mt) from the previous day.
