Chinese steel prices were mostly driven by the supply-side changes in 2017, namely capacity cuts, a government crackdown on producers of substandard steel, environmental inspections and winter production restrictions.
Will there be more supply-side changes in 2018 and will they push up steel prices in the country further? Here are among the developments that Metal Bulletin expects to take place this year on the supply side.Winter production cutsChina began restricting production rates of mills in 28 major steel-producing cities in the northern region in mid-November with the aim of cutting pollution and lowering lower PM2.5 particulate matter levels during the winter heating season. These restrictions will last until mid-March.They come on top of steelmaking capacity cuts carried out throughout 2017 in various parts of the country."These environmental protection policies are implemented out of the sheer determination of the central Chinese government, which led to the recent price increases for steel products amid an obvious decline in supply. As this situation will persist in the short term, we expect steel prices to fluctuate at high levels during the first quarter...