This might, indirectly and some time down the road, be good news to small metal stampers.
The current situation is that, in many cases, our ultimate customers can buy a finished product from China cheaper than we can buy the raw steel, never mind stamp it out. This is because, in China, steel is so cheap. And that, in turn, is because of the overcapacity in that marketplace.
A second factor is the currency manipulation currently going on in China. Of course, this won’t solve that second problem.
Reuters via Yahoo! Asia
China’s cabinet said it would not approve construction of any new steel mills and reiterated it would shut down small, outdated plants in an industry plagued with too much capacity and a raw material shortage.
The State Council also urged tighter controls on lending to and land use by industries plagued with overcapacity, including the aluminium, coke and automobile sectors.
‘In general, the problem of over-investment leading to a capacity surplus in some industries has not been solved completely,’ the State Council said in a document posted on the central government Web site (www.gov.cn) on Monday.
The State Council said it would speed up mergers and closures of small plants in those industries this year.