b'1.2 Chinas efforts to remove steelcapacity hasnt reduced productionBut a downturn may represent a turning pointThe steel industry in China has been blamed for much of the woes faced by the sector globally in recent years. Overcapacity and overproduction in the Peoples Republic of China Peter Buxbaum, AJOT (PRC) have led to dumping steel in international markets, thereby suppressing prices and eat-This article was originally published oning into the profits of companies in advanced economies.March 11, 2019 in issue #684The Chinese government has promised to consolidate capacity in its domestic industry, and indications are that they are making good on their word. China has also implemented stricter environmental regulations for manufacturers, which should also have the effect of reducing steel production capacity. But other policies of the Chinese governmentwhich holds con-siderable sway over its economysuch as a possible economic stimulus program and a more flexible approach to smog reduction, could push production in the wrong direction. Domes-tic Chinese steel production and demand are still on their way up, frustrating the presumed aims and benefits of industry consolidation.[top image] Chinas supply reform and stricter environmental policy have worked positively in the Baotou world steel production market, said Eun Young Lee, a steel industry analyst at DBS Bank in Singapore, but Chinese stimulus policy is the wild card for steel demand.Chinese ConsolidationThe Chinese government has promoted industry consolidation by removing outdated and small players and concentrating on large-scale mills through mergers and acquisitions. Its so-called blue sky action plan directly restricts utilization of steel production capacity and indirectly increases production costs by regulating sintering and coking plants.In the first half of 2018, Chinese steel demand received a boost from a mini-stimulus pack-age for the real estate industry. The government is considering further stimulus policies to mit-igate the harm being done by the trade dispute with the United States. China steel demand growth is expected to decelerate in the absence of stimulus measures, said Al Remeithi, chairman of the World Steel Association (WSA) economics committee. Continued economic reforms and toughening environmental regulations will lead to deceleration of steel demand into 2019. 8 THE UNCONTAINED www.theuncontained.com'