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China Steel Price to Keep Rising on Environmental Factor, SMM Predicts
Aug 4,2016 10:45CST
smm insight
Source:SMM
Since mid July, China’s central environmental protection inspection team has begun checks in eight provinces, and has imposed big impact on local unqualified mills, SMM survey finds.

SHANGHAI, Aug. 4 (SMM) - Since mid July, China’s central environmental protection inspection team has begun checks in eight provinces, and has imposed big impact on local unqualified mills, Shanghai Metals Market survey finds.

The regions covered in this round of inspections include Inner Mongolia, Heilongjiang, Jiangsu, Jiangxi, Henan, Guangxi, Yunnan and Ningxia.

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

So for, Jiangsu is suffering the biggest impact from the latest inspections, according to SMM survey.

“Jiangsu has a large steel capacity, only second to Hebei, and many small steel mills are located there, so it is sensible to understand its impact on the region,” SMM steel analyst says.

Moreover, the nearing G20 Summit in Hangzhou, to be held in early September, has also upgraded inspection efforts in the neighboring region, SMM adds, also affecting Jiangsu. 

“Rising momentum in China’s steel market is expected to be continuing due to production losses from environmental checks and low inventories in trading market,” SMM predicts.

However, its role on eliminating inefficient steel capacities remains to be seen, SMM adds, as profits from current steel prices will persuade mills to restart production once inspection team leaves. 

Region

Impact  

Henan

Angang is running normally, while some local mills will suspend production for one month. 

Inner Mongolia

Baosteel remains online, and some small plants have stopped production for the inspections. 

Guangxi

The inspections are not as tough as those in Jiangsu as steel capacity in the region is limited. Only few mills employing blast furnace have ceased production for the checks.  

Yunnan

Several local plants have chosen to halt production for the inspections, but the impact will be small due to limited capacity in the regio.  

Jiangsu

Production at most small steel mills in northern part of the region has been affected, and plants in the southern part are also expected to suffer the impact.

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