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Chinese steel: Handan caps steel output at 65-75% for the non-heating season. So what?

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Report summary

Just as the '2+26' policy comes to an end - which capped steel output at 50% of capacity - China announces further restrictions on steel output. On 30 March the Hebei government released tighter emission-control measures for industrial production during the non-heating season. Handan, the provincial second largest steel producing region, is required to cap steel capacity utilisation rates at 75% from 1 April to 15 November 2018. We calculate a 6 Mt loss of production - relatively minor in the context of total Chinese steel production of 850 Mt. But should other areas follow suit, declines in production could begin to materially affect the market.

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    Chinese steel: Handan caps steel output at 65-75% for the non-heating season. So what?

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