Hebei Iron and Steel Says China’s Steel Project Ban Will Help

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Heibei Iron and Steel sees China’s steel project ban as a positive. As reported in Reuters, “A vow by China to ban new steel projects until 2017 will help to relieve oversupply in the bloated sector but the policy will take time to have an effect, China’s top steel maker said on Wednesday.”

“New steel capacity addition in China is still exceeding the tonnage due to be shut this year, Wang Jiguang, director of Hebei Iron and Steel Group’s sales unit, told a Metal Bulletin conference in Beijing.”

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“Overcapacity has dogged China’s steel sector for years, wasting resources and causing big losses at heavily indebted mills, forcing them to rely on government subsidies.”

“Beijing has vowed to tackle the problem and said last week that it will ban new projects in industries such as steel and cement until 2017, while gradually eliminating existing operations that are below-standard.”

In metal price news for steel…

Chinese steel prices closed flat for the day. The price of iron ore 58% fines from India was range bound. The price of Chinese HRC saw little movement. The price of Chinese coking coal continues to hover for the fifth day in a row.

For the fifth day in a row, the steel billet cash price remained essentially flat on the LME at $355.00 per metric ton. The steel billet 3-month price continues hovering around $360.00 per metric ton on the LME for the fifth day in a row.

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The US HRC futures contract 3-month price showed little movement on Tuesday at $623.00 per short ton. For the fifth consecutive day, the spot price of the US HRC futures contract held flat at $655.00 per short ton.