From Bloomberg, Jul 30, 2015
A Chinese paramilitary policeman stands guard at Tiananmen Square under crimson clouds at sunset in Beijing, China. Photographer: Feng Li/Getty Images
Steel output in China will be disrupted next month and September as mills around Beijing are ordered to curb production to ensure clean air and blue skies for a parade to mark World War II and sports event, hurting iron ore demand.
Look for more falling ore and met coal and scrap prices to follow as a result.
Steel output in China will be disrupted next month and September as mills around Beijing are ordered to curb production to ensure clean air and blue skies. Why? All for a parade to mark World War II and sports event. Impact Example As much as 6 million metric tons may be cut, more than was lost last year when similar curbs were used for a global summit… says Xu Xiangchun, chief analyst at Mysteel Research. He was citing talks with policy makers and mills. The government plans measures to ensure the air quality, according to an official at the Beijing Municipal Environmental Protection Bureau.
IN THE LONG TERM
Over a longer period, the capital’s air pollution may drive the government more quickly towards far less polluting steel manufacturing processes. Look for a shift towards more scrap charged oxygen plants and mini mills to substitute fro fully integrated ore and met coal steel plants. This shift will affect railway traffic volumes both in China and in far away raw materials nations like Mongolia and South Africa.
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