From Macquarie:
Following several days of heavy pollution, China’s biggest steel city, Tangshan, has had its local government issue an urgent notice ordering all coking plants, sintering plants and blast furnaces to halt production from today. Moreover, all open cut mines have to suspend mining as well. The duration of this order is not disclosed, but is likely to be dependent on air quality changes in the coming days. We view this movement to have a short term positive impact on Chinese steel prices given Tangshan produces 11% of China’s total crude steel, but with Tangshan mills viewed as the marginal buyers of seaborne iron ore we expect some pressure on this price.
Not so far! This helps explain yesterday’s wild price action.
