Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s Tangshan region imposed an orange smog-alert for the second time this month limiting steel production to improve air quality and prevent heavy smog. The Chinese authorities continued with stricter pollution control measures and winter production cuts. The steelmaking hub of Tangshan will implement Level II smog control measures from the noon of December 23.


The city had imposed anti-smog level II measures for 120 hours from Dec 17 to Dec 21. Many blast furnaces which were exempted from heavy production curbs recorded limited production cuts amid available sinter inventories while some steel mills maintained regular production. The earlier anti-smog alert did not significantly impact production in Tangshan.  


During the 120 hours of level II smog alert, sintering, lime kilns and pelletising machines of steel mills that do not help provide heat would have to suspend operations. The steel mills that provide heat are required to lower capacity by 20pc, beside the production cuts. Even after this period, a production cut of 50pc will continue on steel mills that do not help provide heat and are placed under C-level of environmental status.


Chinese steel mills and traders have been raising export offers successively for over a month in line with the strengthening domestic steel prices amid limited supply. However, limited demand and competitive prices from other finished steel supplier countries are likely to impact the prices in the near term. HRC steel SS400 grade traded at $480-485/mt fob China. 

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