China ramps up steel production as Trump threatens Cold War-era restrictions
Be careful not to read too much into the increase, say analysts
A record 73.3 million ton output of steel in June, which surpassed April’s all-time high of 72.78 million, might look bad for China as pressure mounts for Beijing to battle a glut in supply. But it is Beijing’s concerted efforts to reign in production that have driven the increase.
“It’s wrong to think that this is some sort of unified, homogenous voice that is deliberately making some provocative statement to the US,” Paul Adkins, managing director of aluminum consultancy AZ China was quoted by Reuters as saying.
“That couldn’t be further from the truth. What we’re really seeing, if anything, is … a lack of a coordinated response (from Chinese producers).”
“The reason that prices were higher in the first place was the expectation of Chinese cutting back supply of aluminum and steel, yet that is what is inducing its high utilization rates,” said Mark Pervan, chief economist at AME Group in Sydney.
The increased production data comes as the Trump administration is threatening to use a Cold War-era law to restrict imports on the basis of protecting national security and while China and the US sit down this week for trade talks.