China Steel Production Suffers Bigger-than-Expected Impact from Environmental Factor, SMM Says

SHANGHAI, Aug. 3 (SMM) - China’s central environmental protection inspection team has recently begun checks in eight provinces, including Inner Mongolia, Heilongjiang, Jiangsu, Jiangxi, Henan, Guangxi, Yunnan and Ningxia. 

The latest round of inspections has far exceeded market estimate, SMM survey finds. 

“The amount of steel output affected by the ongoing inspections has hit 70,000 tonnes per day, and the impact will expand as inspections continue,” SMM steel analyst predicts. 

Collections of Stories of Environmental Protections and Flooding in China Metals Market, SMM Reports   

Steel mills in the inspected regions are worrisome due to strict checks, according to SMM survey. In Jiangsu, for example, some steel mills in the region are choosing to produce only at night and some are even planning to close till early August, as it is rumored that steel mills will be forced to shut down temporarily or permanently once they are found with incomplete environmental protection and production documents, unqualified environmental protection equipment and excessive discharge of pollutants. 

Moreover, citizens are welcome to report steel mills that violate environmental protection regulations to authorities. 

“Steel supply will take a big hit if production halts last for a long time, and this will offer upward momentum to steel prices, and iron ore prices are expected to hold firm as a whole, though falling steel supply will bit into ore demand,” SMM adds. 

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