How long is the production limit for the heating season for steel production capacity?
Iron and steel companies must first distinguish between the two concepts of stopping the heating season, limiting production, and 
emergency measures for severely polluting weather. The purpose of stopping and limiting production during the heating season is
to offset the newly added pollutants from coal and gas for residential heating during the heating season, and to reduce industrial 
pollutant emissions by stopping and limiting production. Emergency measures for heavily polluted weather are measures to
temporarily reduce pollutant emissions when weather conditions are deteriorating, no wind or rain, pollutants cannot spread 
quickly, resulting in heavy pollution such as haze. The heating season suspension and production limit are only implemented 
during the heating period, and the emergency measures for heavy pollution weather are to be implemented as long as heavy 
pollution weather occurs.
Suspension and production limitation during the heating season can be regarded as a medium- and long-term behavior in units of
months, while emergency measures for severely polluted weather are short-term behaviors in units of days.
In the case of a 30% production limit during the heating season, local governments can temporarily take further control measures
on the basis of a 30% production limit if severely polluted weather occurs.
The environmental capacity of the Beijing-Tianjin-Hebei region is difficult to support the current steel production capacity in the 
region. As long as the haze does not go away for a day, the production restriction policy will continue, and even more stringent 
policies will be introduced to guide the steel production capacity in the Beijing-Tianjin-Hebei region Exit until the environmental
quality improves.
What is the impact of the production restriction policy on the later steel market?
1About the steel market
The industry may be most concerned about steel and upstream and downstream markets. Macroeconomic analysis shows that the
steel industry is directly linked to the macro economy. The macro economy in the second half of the year is not expected to be 
better than the first half of the year. However, the country will not allow the economic situation to decline. Development is the last
word at any time. This is after all related to employment. A series of important issues, it is precisely this gap between expectations and reality that there is room for steel demand.
In general, steel demand will not be bad in the second half of the year, and may even be better than the first half. However, 
compared with the first half of the production, a sudden brake is certain. There is the possibility of steel prices going up, but under 
the country's regulation of commodity prices, it is impossible for steel prices to go up. The next "Golden Nine Silver Ten" is a very
critical stress test, that is, the upper limit of steel prices.
2About the iron ore market
Platts' 62% imported iron ore price fell from a peak of US$233.10/ton on May 12 to around US$145.05/ton on September 3. After 
experiencing a so-called "big drop", it has recently stabilized. . However, from the data of all parties, all fundamentals do not 
support the recovery of iron ore prices, and it is only a matter of time before prices fall. With the follow-up steel mills "restricting 
production", demand will definitely fall, and there will be no situation where the price of high-grade iron ore is pushed up due to 
the "structural shortage" that analysts often said before. "True limit on production" is not a limit on production capacity.
According to the forecast of China Metallurgical News, iron ore imports will decrease by more than 150 million tons in the second
 half of this year? ! The editor thinks that there is a possibility. Iron ore imports in July were only 88.5 million tons, down 21.4% 
year-on-year, and iron ore imports in the next few months will only be even smaller. In the second half of 2020, iron ore imports
 will be about 623 million tons. If calculated according to the year-on-year decline, iron ore imports will fall by more than 130 
million tons in the second half of the year. Therefore, the decline in the price of iron ore is a certainty. As for when the bottom 
will be, the editor believes that there is no bottom before the end of this year.
Generally speaking, the market for environmental protection and production restriction policies should be treated rationally,
 especially in the current situation of objective reduction in demand in the north. Starting from the actual situation that the northern
 market will face passive winter storage in the future, it is not appropriate to over-hype and blindly pull up.