How is the 2+26 policy impacting China’s steel industry?
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The 2+26 policy aims to reduce pollution in winter in northern China. As it takes effect, it will affect the steel industry deeply and we have already seen restrictions taking effect. Steelmakers have been required to cap their utilisation rates at 50% and construction activity has stopped in some areas. These and other measures yet to come are creating huge uncertainty around steel supply and demand in Q4 2017 and Q1 2018. In this insight, we answer three main questions: · Why has this policy been released? · How is it being implemented at a local level? · Which is being harder hit by the policy – supply or demand?
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