International Steel Mills
November 19, 2019
CRU: China’s Steel Capacity Probe May Need Timely Action to Prevent a Crisis
Written by Iris Speelmanns
By CRU Analysts Kevin Bai and Iris Speelmanns, from CRU’s Iron Ore Costs
China has launched a probe into steelmaking capacity to understand the true state of the industry. If the government views the current state as detrimental to its reform agenda, orders to curb supply could be forthcoming. If enough capacity is curbed, this would tighten the market and lift margins from current lows. That said, in CRU’s view, timely action on capacity may be needed to prevent another crisis developing as recent stimulus measures unwind and steel demand softens.
