Blue Sky 2018 Campaign Shocks Steel and Iron Ore Markets

SEATTLE (Scrap Monster): The huge support to the campaign for cleaner skies by various Chinese provincial administrations has jolted the steel and iron ore markets, reports say. This is on account of various provinces announcing further production cuts following the tough production restrictions observed during the winter heating season.

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Tangshan City has issued a statement declaring restrictions on mill production for the 244 days period lasting from March 16^th to November 14^th this year. According to the statement, the iron and steel enterprises located in the main urban area of the city must limit their production by 15%.  Also, those outside the main urban area has to idle 10% of their production during this period. The restrictions are being imposed with the aim of improving the environmental air quality as part of Blue Sky 2018 campaign. Consequently, Tangshan City is likely to idle steel capacities of approximately 9.875 million metric tons.

Earlier, the work report presented by the National Development and Reform Commission (NDRC) had announced that the country aims to reduce steel capacity by around 30 million tonnes in 2018. This will bring the total reduction over three years to 145 million tonnes. This shows that the country is on track to meet its original reduction goal of 150 million tonnes by 2020, well ahead of schedule.

Despite strict production cuts, the country recorded 5.7% surge in steel production during 2017. Also, the NDRC forecasts the production to witness 1% rise in this year. The country has closed some steel mills and implemented production controls on the rest. The ultimate aim of the Blue Sky 2018 campaign is to promote cleaner skies, along with idling down non-productive and loss-making steel enterprises.