BEIJING, Feb 25 (Reuters) - Some Chinese steelmakers in the northern region will need to trim production by at least 30% from March 4 to ensure clean air quality during the annual parliamentary meeting, analysts and consultancies said.
Chinese steel mills, particularly those in the northern region, which is close to capital Beijing, are typically asked to control production for better air quality during the meetings.
The closely-watched annual parliamentary meeting will start from March 5, state media said in late December.
Several steel mills in north China have been notified to voluntarily start production controls, cutting blast-furnace output by no less than 30% during March 4-11, consultancy Mysteel said in a note on Wednesday.
The production controls will likely help slow down a seasonal build-up in steel inventories, supporting steel prices, said Xin Ge, deputy director at consultancy Lange Steel.
"While lower blast furnace output indicates less need for feedstocks, higher steel prices, coupled with the expectation of stimulus policies during the parliamentary meetings, will encourage mills to restock ingredients for a production ramp-up after the key meeting," said Ge.
Steel demand in top producer and consumer China normally picks up in March with warm weather encouraging the restart of construction activities.
Steel futures on the Shanghai Futures Exchange broadly ticked higher with rebar and hot-rolled coil up 1.65% and 1.13%, respectively.