Steel gains traction on Monday

Steel futures in China rose to CNY 3,250 per tonne, the highest since reaching a seven-month high of CNY 3,345 on July 29th as the likelihood of capacity cuts to the steel industry in China returned to investors' forefront.

Reports indicated that Chinese authorities told several steel mills that production will have to temporarily be halted this month due to air-pollution concerns, shortly after policy-makers vowed to trim overcapacity in construction inputs, likely to halt the country's deflationary momentum.

Consequently, Baosteel signaled it expects domestic production to fall by 50 million tonnes this year.

Consumption also maintained its level in the near term as Chinese furnaces imported over 100 million tonnes of iron ore in July, a 1.8% annual gain, as steel exports soared by 11.4% annually year to date, the highest increase for the period on record, despite protectionist trade policies worldwide.