From Mac Bank:
Three weeks before the APEC conference in Beijing, the city has suffered another bout of “airpocalypse” with air quality measures reaching the “hazardous” level three days in a row. While at least part of the cause has been linked to agricultural fires following the autumn harvest, the response has reportedly been to order shutdowns and output restrictions of heavy industry in the surrounding area over 1-12 November. All steelmaking and coking plants within 100kms of Beijing will be required to close – a relatively small impact as there is limited capacity so close to the city . “Unqualified” operations between 100-200kms will have to restrict output – this is potentially more impactful as there is over 200mtpa of capacity in this area, although most belongs to CISA member mills and could be thought of “qualified”. We expect the impact on iron ore prices to be slightly negative and short lived although, in a trend similar to last year when pollution was a concern, Platts reported a spike in the lump premium to its highest since early May.
I’ll add that I think the current bid in rebar prices can be in part put down to this shutdown so the effects probably even out.