A report from Dominique Patton of Reuters claims that several Chinese steel mills have received instructions to cap 2023 output at the same level as the previous year, potentially curbing iron ore demand in ‘the world's top steel market’.
Three mills owned by state-owned China Baowu Steel Group, were given verbal instructions that output should not exceed that of 2022, according to sources ‘familiar with the matter’ and two of those sources claiming the orders were delivered on 24 July 2023.
The authority issuing the orders was not specified and all of the sources declined to be identified.
A communications official within Baowu said he had no information to share on the matter.
According to the Reuters report, ‘China has mandated zero output growth in its steel sector for the last two years as it seeks to limit carbon emissions by one of its most polluting industries’.
"China has mandated zero output growth in its steel sector for the last two years as it seeks to limit carbon emissions by one of its most polluting industries."Dominique Patton's report from China for Reuters.
In 2021 and 2022, the state planner announced the zero growth target in the second quarter, but no public announcement has been made this year, leaving the market guessing on Beijing's plans.
Patton’s report claims that ‘some mills in the northern Chinese city of Tianjin were notified to keep steel output below the 2022 level’, according to reports from local consultancies Mysteel and Fubao yesterday, which did not specify the number of mills.
Similar instructions were received by some mills in eastern China, according to consultancy Shanghai Metals Market.
However, the Reuters report claims that ‘a dozen mills in northern Chinese cities including Tianjin and Handan contacted by Reuters said they had not yet received any instructions to cap their output’.