As Beijing aims for blue skies over G20, China's steel mills get unexpected boost
While the boon from the summit cuts will be fleeting, steel prices have rebounded 51 per cent this year
When Beijing ordered hundreds of industrial plants to close ahead of China’s first-ever G20 summit on September 4-5, the government wanted to spruce up the host city Hangzhou and ensure world leaders would gather under clear blue skies.
In doing so, China’s leaders may have given the nation’s stricken steel mills an inadvertent leg-up, helping to restore profitability after a years-long downturn caused by weak prices as a global glut swelled and demand slowed.
Steel prices have jumped as much as 42 per cent since late May, with the unexpected turn in fortunes all the more striking as the health of the global steel industry is set to feature on the G20 agenda amid escalating tensions over Chinese exports.
Many small mills in neighbouring cities of Hangzhou have been ordered to suspend production for the world summit
Some Chinese steel plants are turning in the best margins in at least three years following increased demand, efforts to tackle a supply glut and an environmental crackdown, with temporary production curbs for events like the G20 accelerating the boost to profits and prices.