China is facing a high-profile test of its commitment to curbing industrial pollution after steel output surged in the first half of the year to well beyond its target of capping production at 2020's peak, sending emissions to new highs.
The country pledged to limit crude steel output this year at no higher than the 1.065 billion metric tons it made in 2020. To meet that goal, steel producers would have to cut output by roughly 10% for the rest of 2021 from their record first-half pace, according to calculations based on National Bureau of Statistics data.
Yet with steel prices already near record highs amid a stimulus-led building and manufacturing boom, any forced supply cuts could fuel further raw material inflation which has sent Chinese producer prices to multi-year highs and forced a slowdown in factory activity.