Speaking during the Met Coke World Summit, Will May, CRU’s principal analyst for steel raw materials, said that although steelmakers in regions unaffected by the curtailments will step up production, they will be limited by already high utilization rates.

China has ordered steel producers in 28 northern cities, including those in the steel-intensive Hebei province, to reduce production during the winter home-heating season. Government officials are hoping to cut air pollution during the winter months by reducing emissions from industrial sources. The cuts are taking effect now and are to last into March.

On another front, May said his firm believes that China’s broader effort to reduce excess capacity has yielded meaningful reductions. He said that by the firm’s assessment, the country has shuttered 110 million tons of induction furnace capacity and about 115 million metric tons of BOF and EAF capacity.

“There’s some work still to be done, but by 2020, they’ll be at capacity of around 971 million metric tons. Given that that capacity has now been closed, what we have is a real improvement in utilization rates in China.” 

Met Coke World Summit 2017 is taking place today and Thursday in Chicago, Ill., USA.