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UPDATE 1-Beijing summons steel execs, regulators, bourse to discuss price surge -sources
August 9, 2017 / 10:32 AM / 3 months ago

UPDATE 1-Beijing summons steel execs, regulators, bourse to discuss price surge -sources

* CISA holds meeting in Beijing to discuss steel prices Wed

* NDRC to hold second meeting on Thursday (Updating to add details on meetings throughout)

BEIJING, Aug 9 (Reuters) - China has summoned regulators, a major exchange and steel company executives to meetings this week to discuss steel prices, people familiar with the matter said, as a surge in markets due to output cuts draws scrutiny from authorities.

On Wednesday, the China Iron and Steel Association (CISA) held a meeting in the capital with its members, an official at the association said, speaking on condition of anonymity.

A second meeting, to be hosted by the National Development & Reform Commission (NDRC), will discuss futures and physical steel prices on Thursday.

The moves come after steel rebar futures prices soared by two-thirds since the start of the year, with investors betting supply will tighten as Beijing forces outdated, polluting factories to close ahead of winter. The closures are part of its war on smog and a drive to make industry more efficient.

The most-active futures were near their highest in 4-1/2 years on Wednesday.

Steelmakers in the smog-prone northern province of Hebei will be forced to halt operations next month if they fail to meet tough new pollution restrictions, the local government said in a notice on Wednesday.

CISA’s meeting focused on years-long efforts to raise efficiencies in the industry, an official from the association said, while another source who had spoken to people at the meeting said it also touched on environmental policy.

Officials from the Ministry of Industry and Information Technology (MIIT), China Securities Regulatory Commission (CSRC), CISA, Shanghai Futures Exchange (SHFE) and some leading companies have been called to attend the NDRC meeting on Thursday, the CISA official said.

A second industry insider confirmed he would be at the meeting, but declined to be identified or provide more details.

Sources said the gathering suggests the government is concerned that the rally in prices has been overdone, fuelled by speculative buying, and is not justified by fundamentals.

The NDRC and the bodies invited to the gathering did not respond to requests for comment on the meeting, referred to by ANZ Research analysts in a note to client issued on Wednesday.

This week, the Ministry of Environmental Protection (MEP) has embarked on its fourth round of environmental inspections across eight provinces and regions, including Shandong, to check on factories’ progress in curbing pollution.

Eight teams will be sent to carry out inspections at Jilin, Zhejiang, Shandong, Hainan, Sichuan, Tibet, Qinghai and Xinjiang from Aug. 7-15, the ministry said on Monday.

Reporting by Josephine Mason and Beijing newsroom; Editing by Kenneth Maxwell and Jacqueline Wong

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