Chinese government orders steel producers in Tangshan to cut production
by David Fleschen
Steel producers in China's Tangshan region will significantly cut production under government orders. The announcement comes ahead of the National Party Congress on 5 March and is primarily aimed at curbing pollution. According to Mysteel, production in the region, which is important for the steel industry, will be cut by 30-50%. Cutting back on particularly energy-intensive steel production both before an important political event and in the winter months is basically a common practice in China.
However, uncertainty about the development of metal demand in China is currently very high, so that any additional dampening factor can have a sensitive impact on market sentiment, which explains why the iron ore price came under pressure, especially after the news.
Source: Commerzbank Research, Photo: Fotolia