An increase in local government power restrictions could lead to a drop in steel output and higher prices, Bloomberg reported, citing a report by Credit Suisse (CS.NYSE). According to Credit Suisse analyst Trina Chen, steel production has already been disrupted as local governments push to meet year-end power efficiency targets. Chen said a fall in production should have a positive effect on fourth-quarter steel prices. The China Iron and Steel Association said in early August that a slowdown in demand resulted in about 40% of the country’s steel makers reducing or suspending production. Output in July fell 3.9% month-on-month to 51.7 million tons, a five-month low.
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