Futures prices of iron ore and coke on the Dalian Commodity Exchange lost 4%, while coking coal gave up early gains in afternoon trade, reflecting market concerns about the plan.
Reuters was not immediately able to confirm the authenticity of the document doing the rounds of traders and analysts online, which says Tangshan city authorities are weighing plans to curtail steel mills’ output for the rest of 2021.
“To strengthen supervision of steel enterprises and raise punishment for illegal behaviour, the city government has... decided to impose production and emission cutting measures on firms that failed to take emergency action,” the notice said.
The Tangshan government did not immediately answer a call seeking comment.
Seven mills will cut production by half from Saturday until June 30, and by 30% in the second half of 2021, the notice said.
These include a stainless steel firm owned by HBIS Group, the Jinma Steel Group, Chunxing Special Steel and Donghua Steel, all recently reprimanded for breaking rules.
