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Factories and mills have been ordered to either halt or limit production from August 20 to September 4, according to a government document seen by Steel First on Wednesday August 5.
All construction works are also to be suspended during the period, according to the order.
Apart from the capital, the neighbouring regions of Tianjin, Hebei, Shandong, Shanxi and Inner Mongolia will also implement similar measures to ensure good air quality during the September 3 parade.
Now that the order is official, some steelmakers in the affected regions who had to contend with rumours of the state-imposed production cuts in recent weeks are breathing a sigh of relief as the order does not kick in until later this month.
“It’s still early now, since the production halt will only be in effect a couple of weeks from now,” a mill source in Shandong province told Steel First.
“The sky in the capital has been blue for several days, so mills’ output limits may not be as stringent as expected,” a Beijing-based analyst said.
The limits will be announced separately at a later date.
“But the boost brought about by the expectations of the production cuts may not fade that soon, as prices had been trending downwards for too long,” a trader in the capital said.
Benchmark grade III 16-25mm rebar in Shanghai was trading at 2,130-2,180 yuan ($342-350) per tonne on Tuesday August 4, up 290-300 yuan ($47-48) per tonne since July 17, just before prices started rising as rumours of the production cuts started to circulate.
And in Beijing, prices for the product were at 2,010-2,140 yuan ($323-344) per tonne on Tuesday, up 150-170 yuan ($24-27) per tonne within the fortnight.