CHINA July 29 2015 2:54 PM
SHANGHAI (Scrap Register): It was rumored that output at steel plants in neighboring regions of Beijing will be cut by 30-50% due to environmental protection drive.
The cut is the environmental protection drive before the parade for the 70th anniversary of the victory of the War of Resistance against Japanese Aggression on Sept. 3.
Is it true?
SMM contacts local steel mills about the cut news, and is told that they have no idea of it so far, receiving no official notification.
In fact, it is a traditionally peak season for unit maintenance at steel mills from late June to early July. Steel market after making positive response to cut news usually shifts its focus to downstream demand.
During 2014’s Beijing APEC meeting from Nov. 5-11, steel prices rallied with production cuts in Hebei, Tianjin and Beijing at first, but then dropped in response to poor demand.
Hence, SMM foresees that steel production in neighboring regions of Beijing will be negatively affected by the environmental drive during the celebration period to some extent, but price will be finally determined by consumption.