Pellet Price, page-498

All good news for iron ore pellets.

Chinese steel rebar 25mm US$645.0/t vs US$641.3/t

• Steel in China remains on track for its fourth daily gain on capacity curbs as the Asian nation announces targets to improve air quality. Rebar and hot-rolled coil futures in Shanghai are heading for the highest close since March 6, with rebar for Oct. climbing as much as +2.1% to 3,960 yuan/tonne on SHFE, as the sector faces capacity cuts at industrial plants, and expansion of areas that will be subject to curbs.
• Tangshan city, China’s largest steel production base, will cut iron and steel-making capacity by 2.81m tons and 5m tons this year respectively, Xinhua reports, citing the city’s government. The city aims to sharply reduce levels of sulphur dioxide, nitrogen dioxide and carbon monoxide in the air by this month, emissions restriction may be extended beyond July if air quality does not improve.
• The notification sent to industrial enterprises today does not mention specific production restrictions, but steelmaking industries are almost certain to face output cuts, prospect of this has lifted steel prices over the last two days in anticipation of tight supply
• Companies will be required to meet the capacity cut targets by the end-Nov. Macquarie Wealth Mgmt note “under a plausible scenario that newly added provinces cut steel production by 30% in the winter, total steel capacity cuts will be higher than last winter”.