Positive sentiments from China’s rationalization of its steel industry are marred by the escalating war on steel trade

As the Chinese government intensifies its commitment on rationalizing the overcapacity in steelmaking within its borders through tighter environmental regulations and policy-driven production cuts, the resulting outcome looks to benefit global steel industries, as the rationalization creates a healthier marketplace capable of supporting fairer steel prices and relaxation of anti-dumping trade measures. Unfortunately, the continuing tit-for-tat war on steel trade between the U.S. and China that remains unresolved, and most recently have spread to the E.U., depresses any positive sentiments that could have given the industry a boost.

Note: China has successfully cut a total of 120 million metric tonnes of excess production capacity between 2016 to 2017, with further production capacity cuts of up to 30 million metric tonnes scheduled in 2018.

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