The Chinese government announced they have shut 42.39 million tons of crude steel capacity in the first half of this year.
According to a report from Reuters, this amounts to 84% of its target for the whole year, putting it well on track to meet its steel capacity reduction goals for 2017.
Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports!
This move also puts China very close to completing its 5-year target in reducing steel capacity, set just last year. That ultimate goal was to cut between 100 million and 150 million tons of excess steel capacity in less than two years.
According to Reuters: “China made the pledge in January 2016 as it bid to put an end to a price-sapping capacity glut that had left the country’s massive steel sector mired in debt and losses. The capacity cuts made this year do not include a nationwide campaign to shut down illegal low-grade steel production, believed to amount to around 100 million tonnes a year, which was completed by the end of June.”
Steel Market Moves Elsewhere in the World
Our own Irene Martinez Canorea wrote recently of the Brazilian steel market and where that is headed. Rising steel prices in the South American nation point toward a general uptrend, but more specific price movements depend on the steel.
Canorea wrote: “Brazil is the largest steel exporter in South America, with increasing production this year. Brazil exports primarily to the U.S. and Mexico, with Mexico serving as the second-largest steel producer in South America. According to preliminary U.S. Census Bureau for June 2017, the U.S. imported 590,473 metric tons of steel from Brazil, up significantly from the 259,285 metric tons imported in June 2016.”
How will steel and base metals fare in 2017? You can find a more in-depth steel price forecast and outlook in our brand-new Monthly Metal Buying Outlook report.
For a short- and long-term buying strategy with specific price thresholds: