At last some clarity on the Chinese steel sector reform that has so disrupted the market his year. Via Macquarie:
China commodities trip: Update on government policy and steel At the start of this year, we highlighted that Chinese commodity demand would be intertwined with government policy in 2017. Government intervention has stepped up since June, raising concerns among market players over supply restrictions within China and leading to recent price rallies, particularly in steel, coal and aluminium.
Our recent meetings with Chinese mills, miners and smelters suggest that this year local governments in China have been very serious in implementing central government policies regarding capacity closures, safety and environmental inspections. As the top leadership has become more powerful and increasingly focused on supply-side reforms, we are seeing a shift in local governments’ attitudes from economic growth at all costs towards environmental protection and safety targets.
